-- CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:
UPS delivered Q1 2026 results with revenue of $21.2B (-1.6% Y/Y, +1.1% vs. consensus) and adjusted EPS of $1.07 (-28.2%, +4.9%). Broad-based volume declines of 7.8% Y/Y extended beyond Amazon reductions, while adjusted operating margin compressed 200 bps to 6.2% despite transformation efforts. Domestic margins compressed 320 bps as cost per piece (+9.5% Y/Y) exceeded revenue per piece growth (+6.5% Y/Y). UPS achieved $600M in Q1 cost savings from Network Reconfiguration and Efficiency Reimagined programs, with $3B expected for the full year. Management maintained its 2026 guidance of $89.7B revenue and 9.6% adjusted operating margin, projecting operational inflection in Q2. We think revenue expectations are reasonable given successful pricing discipline, with revenue per piece up 7.7% Y/Y, but margin expectations may be overly optimistic. We expect fuel surcharges from the Iran conflict to help offset rising diesel/jet fuel costs but risk further volume deterioration as consumers prove elastic to higher costs.