Investing.com -- Baird downgraded United Parcel Service Inc (NYSE:UPS) to "Neutral" on the rising impact of Amazon’s planned volume reduction, which introduces a multi-year challenge for the shipping giant.

Amazon (NASDAQ:AMZN), which accounted for nearly 12% of UPS’s total revenue in 2024, will cut its shipping volume by 50% by the second half of 2026, raising concerns over long-term profitability.

While UPS is shifting focus to higher-margin segments such as healthcare and international markets, the loss of Amazon’s business pressures revenue projections, with 2025 sales now expected to be about 6% below consensus.

“Focusing on profitability over volume growth is a sound long-term strategy, but UPS will have to run even harder to offset the AMZN impact,” analyst at Baird said

Baird expects shares to remain range-bound as the company navigates its restructuring and cost-cutting efforts.

Related Articles

Baird cuts rating on UPS stock to ‘neutral’ as Amazon exit looms

Bernstein upgrades Air Products stock to ‘outperform’ on leadership shift

Stocks tick up as Apple climbs, tariffs in focus