Is United Parcel Service, Inc. (UPS) overvalued or undervalued?
Updated Nov 10, 2026 · hand-researched model · educational, not advice
At a recent price of $110.96, United Parcel Service, Inc. (UPS) sits inside a range too wide to call either way: our valuation lenses put the business somewhere between $37.58 and $235.56 per share. They disagree too widely for us to state a single fair value. We publish the range rather than a midpoint because a number that precise would claim more than the methods can support. This is an educational model, not a price target or a recommendation.
The valuation discounts United Parcel Service, Inc.'s projected free cash flows at a weighted-average cost of capital (WACC) of 9.0%, with a long-run terminal growth rate of 2.5%. About 74% of the enterprise value comes from the terminal value — the portion beyond the explicit forecast window — which is typical for a stable, cash-generative business and a reminder that small changes in the discount rate or terminal growth assumption swing the intrinsic value meaningfully.
Running the DCF in reverse — solving for the growth the current price already assumes — the market is implying roughly 3.2% annual revenue growth for UPS. Our base case instead compounds to about 2.7% a year over the same forecast, so the market's implied growth is broadly in line with our base case. The reverse-DCF is a quick sanity check: it reframes 'is this stock cheap?' as 'do I believe the growth the price requires?' rather than arguing over a single point estimate of fair value.
Sensitivity matters more than any single number. Across a reasonable band of discount-rate assumptions, UPS's modeled DCF value ranges from about $58.61 to $158.98 per share. If that range still sits below today's price, the market is optimistic relative to the model across the whole band; if it brackets the price, the stock is roughly fairly valued on our assumptions. Use the interactive slider to see exactly where your own cost-of-capital view lands.
How to read this page: the DCF fair value is what United Parcel Service, Inc. would be worth if its cash flows grow as modeled and are discounted at the stated WACC. The assumptions table shows every input and its source; the reverse-DCF shows what the market believes; the sensitivity band shows how fragile the answer is. None of this is investment advice — it is a transparent, auditable framework for forming your own view of UPS's intrinsic value. Figures update as new filings and prices come in.
The assumptions behind UPS's DCF
| Input | Value | Source |
|---|---|---|
| Base-year revenue | $88,661,000,000 | UPS FY2025 10-K (accession 0001628280-26-008432, filed 2026-02-17): us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax, FY2025 = $88,661M, -2.6% on FY2024's $91,070M. The decline is DELIBERATE: UPS agreed in January 2025 to cut volume from its largest customer, Amazon (10.6% of FY2025 revenue, 11.8% in FY2024), by more than 50% from 2024 levels, and insourced SurePost. FY2025 also includes only a stub of Andlauer Healthcare Group (acquired Q4 2025; aggregate 2025 acquisitions ~$2.0B net of cash, impact on 2025 revenue 'not material' per Note 8). CROSS-CHECK: H1 2026 revenue $44,036M, +3.0% YoY (Q2 +7.6%), per the 2Q 2026 release — the glide-down completed in June 2026 and growth has resumed, mostly on revenue per piece (+11.3% in Q2) against volume -3.7%. |
| Base EBIT margin | 8.9% | UPS FY2025 10-K (accession 0001628280-26-008432, filed 2026-02-17): GAAP operating profit $7,867M / $88,661M = 8.87%. GAAP, so it INCLUDES $593M of transformation strategy costs, $182M of goodwill/asset impairments (mostly the MD-11 fleet write-off) and a $19M divestiture loss; UPS's adjusted margin was 9.8% ($8.7B). Kept GAAP, as in the FDX model, because UPS has booked transformation costs every year (FY2024 $322M, FY2025 $593M, FY2026 guided $1.3-1.5B). EXCLUDES 'other pension income', which sits below operating profit (non-service pension cost and UPS's year-end mark-to-market) — pension service cost stays inside this margin. CROSS-CHECK: H1 2026 GAAP margin was 5.0% (adjusted 7.8%), depressed by $1,227M of transformation costs, mostly the Driver Choice voluntary separation program. |
| Forecast revenue growth | 3% → 2% → 3% → 3% → 2% | Assumption — TickerWorth's 5-year explicit forecast |
| Risk-free rate | 5.2% | US 10Y Treasury constant maturity (FRED DGS10): 5.24% on 2026-10-01, the latest published observation; program-wide rate shared by every researched model. |
| Beta | 1.05 | yfinance 5Y-monthly beta: Published beta 1.046, used as-is (rounded). Not normalized: unlike FDX (whose history is contaminated by the pre-spin Freight business) UPS's five-year window covers the same company, if one shrinking its largest account. Beta 1.0 gives ~$93/share — almost exactly the price — and 1.1 gives ~$86, so this input alone spans the gap. |
| Terminal growth | 2.5% | Assumption — house default: House default 2.5% (about long-run nominal GDP), kept for comparability with FDX and every other company in this tracker. Generous against UPS's own record — revenue is below FY2021's $97.3B — so 2.0% (which takes ~$7/share off) is a fair downside. Must stay below WACC of ~9.0%. |
| Diluted shares | 851M | UPS Q2 2026 10-Q (accession 0001628280-26-053249, filed 2026-08-05): Q2 2026 denominator for diluted EPS, 851M (H1 also 851M; FY2025 850M), Class A and Class B combined (equal economic rights). UPS reports it in whole millions. No buybacks in H1 2026 (8.6M shares repurchased in H1 2025). |
| Market price | $110.96 | Delayed quote · as of 2026-11-10 05:05 UTC |
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Most undervalued stocks (per our valuation) · Undervalued Industrials stocks · All valued stocks · Interactive UPS valuation & downloadable modelTickerWorth is an educational DCF tool, not a licensed investment adviser. Figures are estimates derived from public filings and market data and can be wrong.