联合包裹服务公司（UPS）：2025年第一季度业绩保持稳定，但不确定性笼罩前景

1Q25 Results Hold Steady, But UncertaintyClouds Outlook While 1Q results were largely better-than-feared, the 2Q guide comes up lightwith US Domestic margin ~7.3% vs ~8% expected. Importantly, the 2Q guideincorporates the estimated impact of tariffs and de minimis exemptions, callingfor a ~25% decline in demand in the China-to-US trade lane. At the sametime, UPS accelerates is cost out program associated with the AMZN volumedecline, targeting $3.5bn in saves in 2025. At 13x/11x our 2025/2026 EPS, reit.Buy. 1Q Recap:This is a follow up to our note published this morning (link here). Recall, UPS reported1Q25 results with adj. EPS 8% above while adj. OP was roughly in-line at ~2% above. Given therecent macro uncertainties, while the company did not provide any updates to its 2025 outlook,UPS did provide certain 2Q expectations. Puts and Takes of the 2Q Guide:In terms of the 2Q, the company is looking for consolidatedrevenues of ~$21bn with a total-company adj. OM% of 9.3%. While the top-line is roughly in-linewith expectations, the margin commentary and subsequently profit guide is ~90bps/~9% below,respectively. From a segment perspective, the guide assumes U.S. Domestic revenues decline bya LSD% YoY as ADV declines 9%, while segment adj. OM% increases 30bps YoY to 7.3%. Similar tothe full-quarter outlook, while the top-line drivers were largely in-line, the margin guide comes in lightvs. expectations. On International, the 2Q outlook would call for revenues to decline ~2% YoY onflat-to-down volumes and for a segment margin in the mid-teens. On SCS, revenues are expectedto decline $500mm YoY to $2.7bn as a result of the Coyote divestiture while operating marginexpands to a HSD%. Importantly, the 2Q guide incorporates the estimated impact of announcedtariffs and changes to de minimis exemptions. Specifically, the outlook would see a significantreduction in demand in the China-to-U.S. trade lane, with May seeing a 25% YoY decline. Thisis being partially offset by growth in China-to-non-U.S. lanes (+40%) and growth in rest of worldinbound to the U.S. Domestically, the 2Q outlook also factors in volume and mix considerationsfrom the current level of consumer demand. How We're Thinking About the Stock Here:Overall, while the macro uncertainties remain elevatedand ever-evolving, we feel confident about three things: (1) the near-term 2Q guide (for its part)factors in a defensible set of assumptions — more than we've heard from most other T&Lcompanies this earnings season; (2) UPS is well positioned to respond to and uniquely benefitfrom global supply chain shocks with its integrated global logistics network; and (3) under-the-surface, the company will continue to execute on transforming the network and taking out coststo structurally improve margins, ROIC, and FCF. With the company's internal initiative to reduceunprofitable AMZN volumes and take costs out of the network to structurally improve margin, wecontinue to think that sentiment looks too negative and reiterate Buy. Stephanie Moore * | Equity Analyst(615) 934-1384 | smoore@jefferies.com Joseph Hafling * | Equity Associate+1 (212) 778-8707 | jhafling@jefferies.com PJ Sullivan * | Equity Associate+1 (646) 805-5461 | psullivan@jefferies.com The Long View: UPS Investment Thesis / Where We Differ In our view, UPS is among the highest-quality operators in the transportation& logistics space. UPS is not only one of the largest global logistics players,but it also enjoys best-in-class margins, returns, and cash flow generation.Over the past five years, the company has generated over $37bn in FCF andreturned $30bn to shareholders via dividends and share repurchases. Notably,it recently increased its quarterly dividend to $1.64/qtr, which would equate toover $5.5bn in annual recurring dividend payments to shareholders, yieldingover 6%. Looking ahead, we believe UPS can continue to raise the bar, evenunder a challenging macro, driven by a world-class management team. Upside Scenario,$180, +86% Downside Scenario,$90, -7% Base Case,$130, +34% •2025 revenues decline -4% to $87.5bn as U.S.Domestic Package volumes decline -9% as aresult of shedding the AMZN business whileRPP grows 5%.•2025 adjusted operating margin of 9.8% is flatYoY while US Domestic margin expands to8.0%.•2025 EPS of $7.25 is down 6% YoY while 2026EPS grows ~20% to $8.65.•Our $130 PT is based on 15x our 2026 EPSestimate, in line with UPS's historical range of14x-18x •2025 revenues grow as core growth withinU.S. Domestic outpaces the lost volumes fromAMZN.•2025 adjusted operating margin expands100bps to 10.8% as U.S. Domestic marginreaches DDs.•2025 EPS of $8.00 with 2026 EPS of $10.00.•Our $180 PT is based on 18x our bull-case2026 EPS of $10.00, at the high end of UPS'shistorical range of 14x-18x. •2025 revenue growth is pressured by the AMZNvolumedecline while underlying volumesremain soft on tariff-related uncertainties.•2025 sees operating deleverage and margincompression and costs don'