UPS: UPS Forecasts Weaken on Tariff Uncertainty, Weather Disruptions: BofA Cuts Q1 EPS Estimate by 15%

In This Article: United Parcel Service ( UPS , Financials ) is projected to report an 8% year-over-year decline in domestic volumes for the first quarter of 2025 due to ongoing tariff concerns and severe winter conditions, according to Bank of America Securities. Warning! GuruFocus has detected 2 Warning Sign with UPS. Bank of America Securities forecasts an 8% decline in domestic package volumes for United Parcel Service in the first quarter of 2025. The projection takes into account strategic internal changes within the business, weather disturbances, and tariff-related uncertainties as well as pressure from these factors.The expected drop occurs during a larger UPS delivery strategy reconfiguration. A major client whose slow move to in-house logistics has impacted shipping companies, the firm is projected to lose around half of its Amazon ( AMZN , Financials ) business by mid-2026. UPS is internalizing 50% of its SurePost volumes at the same time, which affects general volume measurements as well as raises average rates.Bank of America analyst Ken Hoexter reacted by cutting his first quarter earnings per share projection by 15% to $1.31. Based on updated projections for worse operational performance and reduced margins, the 2025 full-year EPS forecast was also reduced by 6% to $7.40.Although UPS's January performance exceeded expectations, internal data allegedly indicate February and March volume decline. Bank of America reports the firm is not aggressively restructuring costs right now as it sees the weakness as transient.Now forecast at $643 million in Q1, international adjusted operating income is down from a prior projection of $733 million. Operating margins are predicted to shrink to 15%, down from 17% a year earlier.Bank of America reaffirmed its Buy recommendation on UPS despite these obstacles, saying long-term faith in the company's capacity to reduce structural expenses as required. Based on a value of 17.5 times expected 2025 profits, the price objective was cut by 3% to $129. This article first appeared on GuruFocus .