UPS Surprises Market with 2026 Free Cash Flow Guidance
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 02 2026
0mins
Should l Buy UPS?
Source: Fool
- Free Cash Flow Guidance: UPS's forecast of $6.5 billion in free cash flow for 2026 significantly exceeds Wall Street expectations, ensuring the $5.4 billion dividend payment and boosting confidence among passive-income investors.
- Cost Savings Plan: The company anticipates generating $3 billion in cost savings in 2026, following $3.5 billion in 2025, with some savings stemming from reduced Amazon delivery volumes, which will enhance cash flow and profitability.
- Capital Expenditure Reduction: UPS plans to cut capital expenditures from $3.7 billion in 2025 to $3 billion in 2026, which will further improve cash flow, with projected 2026 revenue at $89.7 billion, resulting in a capital expenditure ratio of 3.3%.
- Impact of Property Disposals: UPS reported $5.47 billion in adjusted free cash flow for 2025, including $700 million from property disposals, indicating a strategic shift in asset management, although this figure does not fully reflect the company's underlying cash flow health.
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Analyst Views on UPS
Wall Street analysts forecast UPS stock price to fall
19 Analyst Rating
9 Buy
9 Hold
1 Sell
Moderate Buy
Current: 118.070
Low
80.00
Averages
107.06
High
126.00
Current: 118.070
Low
80.00
Averages
107.06
High
126.00
About UPS
United Parcel Service, Inc. provides a range of integrated logistics solutions for customers in more than 200 countries and territories. Its U.S. Domestic Package segment offers a range of United States domestic air and ground package transportation services. Its air portfolio offers time-definite, same-day, next-day, two-day and three-day delivery alternatives as well as air cargo services. Its ground network enables customers to ship using its day-definite ground service. UPS SurePost provides residential ground service for customers with non-urgent, lightweight residential shipments. Its International Package segment consists of small package operations in Europe, Indian sub-continent, Middle East and Africa, Canada and Latin America and Asia. It offers a selection of guaranteed day- and time-definite international shipping services. Its supply chain solutions consist of forwarding, logistics, customized third-party logistics and specialized cold chain transportation solutions.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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