The delivery name missed top- and bottom-line estimates for the second quarter
United Parcel Service, Inc. (NYSE:UPS) stock is 11.3% lower to trade at $128.74 this morning, after the shipping name’s second-quarter earnings and revenue miss, as well as its lowered fiscal-year revenue guidance. FedEx chalked the lackluster results up to weaker demand for delivery services and higher labor costs after last year’s Teamster union labor agreement.
Trading at its lowest level since August 2020, UPS is also pacing for its worst single-day percentage loss on record. UPS sports a 32.3% year-over-year deficit, as it continues to fall from its February 2022 record highs.
Options activity is running rampant, with 36,000 puts and 28,000 calls exchanged so far today, or 12 times the intraday average volume. Most popular by far is the weekly 7/26 125-strike put, where new positions are being sold to open.
This denotes a shift in sentiment. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity sports a 50-day call/put volume ratio of 2.05 that stands in the 86th percentile of annual readings, implying a penchant for long calls over the last 10 weeks.
And while the brokerage bunch is already mostly pessimistic on UPS, there’s still ample room for downgrades and/or price-target cuts. In fact, 10 of the 22 analysts in coverage call the stock a “strong buy,” while the 12-month consensus target price of $159.51 is a 23.7% premium to current levels.