United Parcel Service Inc (NYSE:UPS) stock rose 1.69% (As on September 23, 11:23:41 AM UTC-4, Source: Google Finance) after BMO Capital downgraded the company to Market Perform from Outperform with a price target of $96, down from $125. The company is not seeing a recovery in demand, especially in its “important” business-to-business segment, amid macro environment challenges and shifting U.S. trade policies, the firm tells investors in a research note.

The rating change comes as BMO Capital cited an “elusive” recovery in demand, particularly in the business-to-business (B2B) segment, which represents a crucial market for the shipping giant. Despite these challenges, UPS maintains a robust 7.71% dividend yield and has raised its dividend for 15 consecutive years. The firm noted that macroeconomic challenges have been “further heightened by shifting U.S. trade policies,” specifically mentioning the ending of de minimis exemptions, which could impact cross-border shipments. While UPS continues efforts to realign its U.S. domestic network toward small and medium-sized businesses (SMBs) and away from lower-margin business-to-consumer (B2C) operations, BMO Capital observed that cost savings from these initiatives are materializing “more gradually” than anticipated. The firm also highlighted that UPS faces challenges with network density as it insources its Surepost service, prompting BMO Capital to lower its financial estimates for the company alongside the downgrade.

Meanwhile, United Parcel Service Inc. (UPS) has terminated its planned acquisition of Estafeta due to unmet closing conditions, as disclosed in a company statement filed with the Securities and Exchange Commission. The decision to end the acquisition plan was made without additional details on the specific conditions or future intentions. In terms of financial performance, UPS reported adjusted second-quarter earnings per share of $1.55, slightly below the consensus estimate of $1.56. Following these results, UPS management withdrew its guidance for 2025, citing market uncertainty. Additionally, VerifyMe’s subsidiary, PeriShip Global, LLC, has signed significant agreements with UPS, including a UPS Digital Channel Program Agreement and a UPS Partner API Access Agreement, which could impact future logistics operations. These recent developments reflect ongoing strategic adjustments and market responses affecting UPS.

Further, recently, Ken Hoexter from Bank of America Securities downgraded United Parcel Service, Inc. (NYSE:UPS) from Hold to Sell, while also reducing the price target from $91 to $83. The analyst noted that the downgrade reflects increased pressure on the company’s volume and costs due to the end of US de minimis exemptions. He elaborated that the International Priority and Economy packages make up 16% of the company’s revenue. Therefore, the removal of the de minimis exemption is expected to reduce air shipment volumes during the 2025 peak season. The analyst expects this to weigh on the company’s earnings. As a result, Hoexter has cut the firm’s Q3, 2025, and 2026 EPS estimates by 6%, 3%, and 4%, respectively.