What's happening with UPS? Analysis
Labor Relations and Employee Concerns:
Amazon's Impact on UPS and FedEx:
Price action:
- A recent article by UPS employee and bargaining committee member, Jill Dunson in Newsweek, discusses the UPS contract.
- Many workers have issues with the contract, specifically over starting wages, wage hikes, working conditions, and pension contributions.
- UPS has settled with the International Brotherhood of Teamsters, representing approximately 330,000 workers.
- Some part-time employees have expressed discontent with the new agreement.
- Steps have been taken by UPS to prevent strike effects, which includes training non-union delivery personnel.
- By January 2024, UPS plans to implement better working conditions by equipping delivery vehicles with air conditioning and other safety features.
Amazon's Impact on UPS and FedEx:
- Amazon is restarting a third-party logistics effort, causing nervousness among investors in logistics stocks.
- Amazon plans to roll out more than 300 electric delivery vehicles in Germany and aims to have 100,000 on the road globally by 2030.
- Amazon's logistics program poses competition for UPS and FedEx, leading to a decline in their shares.
- Some analysts suggest that Amazon could become a shipping giant by acquiring FedEx.
- Increased shipping rates imposed by UPS and FedEx have caused concern, and Amazon may believe it can perform more efficiently or less expensively.
- FedEx CEO, Raj Subramaniam, believes that Amazon's attempt to compete directly will be difficult.
Price action:
- UPS stock price is hovering near the support range of $165 and showed a breakdown of the rising wedge pattern.
- The stock is trading in a narrow congestion range due to negative sentiment from mixed Q2 earnings results.
- Multiple bearish patterns have formed, with the stock slipping below the 38.2% Fib level and lower Bollinger band.
- The RSI is in the oversold region, showing bearish divergence.
- The MACD indicator formed a bearish crossover and red bars on the Histogram.
- The stock closed below the trendline of $170, and support levels are at $160 and $150, while resistance levels are at $180 and $190.
- Analysts maintain a neutral rating with a yearly target price of $191.54.
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