Shares of United Parcel Service (NYSE: UPS) stock jumped in post-Christmas trading and are up 6.3% as of 3:35 p.m. EST. No one factor appears to be behind the sudden strength in UPS shares. Rather, three factors appear to be behind it.
Continue Reading Below
First, on Wednesday, Mastercard's SpendingPulse market-research service reported that online spending was up 19.1% year over year in the period running from November 1 through December 24 -- which suggests that companies like UPS, which ship such online orders, should benefit similarly. Second, CNBC is, in fact, confirming today that "shipping companies [saw] record e-commerce deliveries" in the Christmas delivery season.
Third, this morning, analysts at Standpoint Research initiated coverage of UPS stock with a buy rating. Granted, so far there's little detail available on Standpoint's rationale for rating UPS a buy. Regardless, three positive news items in a row seem like it should be enough to lift a stock, and true to form, investors are bidding up UPS big-time.
Will UPS be able to hold onto today's gains? That depends.
For one thing, while overall "online spending" was up 19.1%, that doesn't necessarily mean that the increase in spending went to retailers that use UPS to deliver their packages. Amazon, in particular, has been working hard lately to handle more of its package delivery on its own, including through the use of services such as Amazon Air. It remains to be seen how big a proportion of this year's holiday sales gains will benefit UPS -- and by how much.
For the time being, however, the outlook appears positive.
10 stocks we like better than United Parcel ServiceWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has quadrupled the market.*
David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and United Parcel Service wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of November 14, 2018