Is United Parcel Service Inc (UPS) overvalued?
On Equity Rank's model estimate, UPS trades 22% above its fair value. United Parcel Service Inc (UPS) last closed at $108.30; the multi-method model fair value is $88.83.
| Price | Model fair value | Price vs model |
|---|---|---|
| $108.30 | $88.83 | 22% above |
What the answer rests on
- 3 of 9 valuation methods put UPS's value above its price and 6 put it below, so the methods disagree.
- To justify today's price, UPS's free cash flow would need to grow about 5.9% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew -20.1% a year.
- UPS trades at 21.2 times its last year's earnings, against a median of 32.0 for 17 profitable Freight companies.
- Over the past year the price sat below the model fair value on 0% of trading days. The gap ranged from 11% above to 68% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind UPS's fair value · What prices assume · Other companies