Al Root

United Parcel Service has struggled with a choppy economic environment lately. That leaves it up to the company -- with what it can control -- to get the stock moving in 2026.

The logistics provider is set to report fourth-quarter earnings on Tuesday morning. Wall Street is looking for earnings per share of $2.20 from sales of $24 billion. A year ago, UPS reported EPS of $2.75 from sales of $25.3 billion.

Sales are expected to decline partly due to tariff headwinds on shipping volumes, weak manufacturing activity, and less business from Amazon.com, which UPS walked away from, citing weaker profitability.

Lower sales have weighed on investor sentiment. Coming into the week, UPS stock was down 19% over the past 12 months, trailing the S&P 500 by about 32 percentage points.

Growth has been a struggle for the sector since a post-Covid shipping bump. UPS generated 2022 sales of about $100 billion and an operating profit margin of almost 14%. Sales in 2025 are expected to be about $91 billion with an operating profit margin of under 10%.

Investors will want to see improvement. It will be up to the company to control costs and show earnings momentum, wrote Evercore ISI analyst Jonathan Chappell in a preview report, adding that "macro demand headwinds and an inefficient cost structure today" are reasons to be cautious.

Some caution is already reflected in shares. Declines have left UPS stock trading for about 15 times earnings, down from a historic average of closer to 16 times.

For 2026, Wall Street expects sales of about $88 billion, essentially the same as 2025, and operating profit of about $8.6 billion, a touch better year over year.

Along with an outlook for 2026, investors will be looking for any comments about the dividend. UPS stock yields about 6% and the dividend costs about $5.6 billion annually, very close to what the company is expected to earn in 2025 and 2026, leaving little margin for error.

There could also be an update about the company's fleet of MD-11 jets following the tragic crash of a cargo plane in Kentucky in November. At the end of 2024, UPS owned and operated 294 aircraft, including 38 MD-11 jets. Those planes are unlikely to ever come back into service.

Write to Al Root at allen.root@dowjones.com

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January 26, 2026 16:41 ET (21:41 GMT)

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