UPS stock is bouncing, just as Amazon walks away
UPS stock has quietly rebounded over the past three months after steep losses tied to weak shipping demand and labor fallout.
Since mid-September, UPS shares have climbed about 20%, reclaiming the $100 level for the first time since the summer.
Even after the rebound, the stock remains roughly 20% lower for the year and is trading at less than half of the all-time high it reached during the peak of pandemic-era lockdowns.
UPS’s Jekyll-and-Hyde year reflects the challenges the shipping giant carried into 2025.
Global parcel volumes were slow to recover as e-commerce demand normalized, leaving the company with excess capacity just as growth stalled.
At the same time, UPS was operating under a labor agreement reached in 2023 that raised wages and benefits, an outcome welcomed by workers but one that pressured margins as demand softened.
The new contract remains in effect until July 31, 2028.
Those headwinds were compounded by President Trump’s trade war, which injected uncertainty into the global economy.
Businesses and consumers pulled back on discretionary spending, further reducing shipment volumes.
The stock’s recovery since September has been accompanied by technical relief signals, including a rebound from oversold levels and the emergence of potentially bullish chart patterns, such as a cup-and-handle formation that some traders view as supportive of further near-term gains.
Whether the recent advance proves to be a temporary relief rally or the early stages of a more durable turnaround remains an open question.
Turnaround efforts are underway, but pain persists
UPS delivered a stronger-than-expected third quarter, reporting adjusted earnings of $1.74 per share on revenue of $21.4 billion.
The results exceeded Wall Street expectations for $1.30 in adjusted earnings per share on $20.83 billion in revenue.
However, the quarter also came with significant caveats. Most notably, UPS disclosed that it cut roughly 34,000 jobs this year, far more than the previously estimated 20,000, according to CNBC, highlighting the depth of the company’s cost-cutting efforts.
Another red flag was the sharp decline in shipping volumes from Amazon, UPS’s largest customer.
Amazon-related volumes fell 21.2% during the quarter, accelerating from a 13% decline in the first half of the year.
The drop reflects Amazon’s continued shift toward handling more deliveries through its own in-house logistics network, reducing its reliance on third-party carriers like UPS as it seeks tighter control over costs and delivery times.
Taken together, the results suggest UPS’s turnaround is gaining traction, but not without meaningful collateral damage.
Cost cuts are improving near-term profitability, even as lost volume and workforce reductions underscore the challenges still facing the business.