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Essay / United Parcel Service (ups)
United Parcel Service (UPS) has begun testing smart lock technology in apartment buildings across New York City, which allows multiple packages to be secured at specific locations. Investors are concerned that Amazon's (AMZN) intrusion into the delivery industry and the looming global trade war could hurt UPS. The stock has fallen 7% since the start of the year and 16% over the past six months. The company has already partnered with startup Latch to allow UPS drivers to have different access credentials for each building on a route. Market analysts believe that smart lock technology along with last-mile delivery will help reduce package theft and the need for repeated delivery attempts. Say no to plagiarism. Get a Tailored Essay on “Why Violent Video Games Should Not Be Banned”?Get the Original Essay This smart lock is very similar to technology being tested by FedEx (FDX), Amazon (AMZN), and Walmart (WMT). Delivery companies have invested heavily to meet the growing demand for online deliveries. In general, residential deliveries remain more expensive than business deliveries because more packages are delivered via office stop than to homes. In June, UPS announced a five-year agreement with the International Brotherhood of Teamsters union, possibly suggesting Sunday delivery, higher pay for employees and offers for more flexibility in UPS's cost structure. . The new agreements will come into force on August 1, 2018, once ratified by employees. During this period, UPS is scheduled to report its second quarter results on July 25 before the market opens. Market analysts expect the company to post 22.20% higher profit in the second quarter, on sales growth of 10.1%. Additionally, investors should remain neutral on the stock, as recommended by 19 of the 26 analysts who maintained a "hold" rating. Amazon's plan to help customers build their own delivery businesses and a last-step delivery option called Hubs remains a crucial battle against UPS. Market analysts expect UPS to fight back with new strategies to survive in the race for deliveries. Keep in mind: this is just a sample. Get a personalized article from our expert writers now. Get a Personalized Essay Additionally, research firm UBS Securities believes that domestic trends could better benefit UPS and that improved margins and better operating income are expected in the near term. Bernstein still views UPS as an attractive acquisition. Despite concerns over trade wars and Amazon's shipping expansion, market analysts suggested investors focus on UPS profit margin growth from upcoming quarterly results, aided by growth e-commerce delivery volumes. Shares of UPS are trading down 0.02% at $110.63 on the NYSE as of 12:49 p.m. ET. The stock traded between $101.45 and $135.53 over the past 52 weeks..