United Parcel Service, Inc. (UPS): A Bull Case Theory

We came across a bullish thesis on United Parcel Service, Inc. on wallstreetbets subreddit by Schemesymcplots. In this article, we will summarize the bulls’ thesis on UPS. United Parcel Service, Inc.'s share was trading at $85.98 as of October 7th. UPS’s trailing and forward P/E were 12.73 and 11.64 respectively according to Yahoo Finance.

Berkshire Hathaway, led by Warren Buffett, appears to be quietly building a significant position in United Parcel Service (UPS), a beaten-down industrial leader, with the Q2 13F filing expected to reveal the move imminently. UPS has underperformed in 2025, down 30% year-to-date, weighed by labor disruptions, soft volumes, and recession fears, but Buffett’s strategy focuses on undervalued, high-quality businesses with durable moats, and UPS fits this mold.

The company operates a proprietary logistics network spanning 220 countries, 500 planes, and 120,000 vehicles, serving Fortune 500 clients and maintaining diversified revenue streams, with Amazon representing only 13% of total business. Its forward P/E of 13x and a 4.8% dividend yield highlight the stock’s valuation appeal relative to broader markets.

UPS is positioned to benefit from ongoing e-commerce growth, healthcare logistics, and international expansion, with management targeting 5–7% revenue growth and a 10% EPS increase in 2025. Efficiency initiatives, including automation, electric vehicles, and route optimization, are expected to generate over $1 billion in annual savings, expanding margins and driving free cash flow above $10 billion. Despite bearish narratives about Amazon, UPS is focusing on higher-margin clients and long-term network advantages, reinforcing its competitive edge.

Buffett’s disciplined, value-oriented approach suggests confidence in the company’s resilience and long-term prospects. With its combination of growth, cash flow, dividend sustainability, and moat, UPS presents a compelling investment opportunity, offering a potential upside catalyst as the market reacts to Buffett’s reveal, with estimates suggesting shares could exceed $100 by year-end.

Previously we covered a bullish thesis on FedEx Corporation (FDX) by Daan Rijnberk in September 2024, which highlighted the company’s strong market position, efficiency programs, and attractive valuation. The stock has depreciated approximately 18.72% since coverage due to labor and volume concerns. The thesis still stands as operational improvements continue. Schemesymcplots shares a similar perspective on UPS but emphasizes Buffett’s value-oriented accumulation and UPS’s durable moat.

United Parcel Service, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 53 hedge fund portfolios held UPS at the end of the second quarter which was 57 in the previous quarter. While we acknowledge the potential of UPS as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.