UPS Stock Bounces Back: Is Now the Time to Buy Below $105?

The Financial Turnaround Nobody Saw Coming

United Parcel Service has endured a rough stretch since 2022, but Q3 2025 results suggest the worst may finally be behind the package delivery titan. The numbers tell a compelling story that contradicts the pessimistic narrative surrounding the stock.

What caught Wall Street off guard wasn’t just that UPS beat expectations—it was by how much. While revenue declined 2.6% year-over-year to $21.4 billion (exceeding analyst projections of $20.8 billion), the real shocker came on the bottom line. UPS delivered adjusted earnings per share of $1.74, crushing the consensus estimate of $1.30. This 34% earnings beat signals something deeper: operational execution is improving despite a challenging macro environment.

CEO Carol Tomé has overseen an aggressive restructuring that goes beyond typical cost-cutting. The company eliminated 34,000 positions in the workforce and 14,000 management roles during the first nine months of 2025—significantly more than the initially planned 20,000 reductions. These moves suggest management is confident in their strategic direction.

Strategic Pivots and New Partnerships

Carol Tomé’s leadership hasn’t been limited to internal restructuring. She personally engaged with the new Postmaster General to forge a preliminary agreement between UPS and the USPS. Under this arrangement, UPS will handle the critical “middle mile” logistics while USPS manages final-mile delivery. This partnership could reshape the competitive landscape for package delivery in the U.S.

The stock has responded positively, climbing roughly 17% since early October. However, the more significant strategic move came with UPS’ decision to drastically reduce Amazon shipment volumes—a decision Tomé described as “the most significant strategic shift in our company’s history.” This pivot toward higher-margin business segments, particularly healthcare logistics, represents a fundamental business model transformation.

Headwinds Remain: Tariffs and Cash Flow Concerns

Despite these wins, Carol Tomé acknowledged during earnings calls that tariff-related pressures will intensify in 2025. Small-to-medium-sized businesses (SMBs) represent a meaningful chunk of UPS’ customer base, and import duties could crimp shipping volumes and profitability for these clients.

Another worry for income-focused shareholders: the dividend sustainability question. UPS paid out $4 billion in dividends during the first nine months of 2025 but generated only $2.7 billion in free cash flow. That $1.3 billion gap is difficult to ignore. While CFO Brian Dykes expects “significantly more free cash flow over time” as restructuring takes hold, near-term dividend safety isn’t guaranteed if this imbalance persists.

Who Should Buy?

For Growth Investors: UPS likely won’t excite those seeking explosive returns. Even with operational improvements, the company is unlikely to deliver outsized growth in the near term.

For Value Investors: The forward P/E ratio of 13.6 looks attractive relative to historical averages and peers. The operational turnaround appears genuine, and the worst-case scenario may have already passed. UPS warrants serious consideration at these price levels.

For Income Investors: The 6.6% forward dividend yield is meaningful. Carol Tomé and her team have repeatedly affirmed their commitment to the dividend program. Management believes restructuring will unlock significantly higher free cash flow, easing cash flow pressures and making the dividend more sustainable long-term.

The Bottom Line

UPS at below $105 isn’t a universal buy, but it’s worth considering for specific investor profiles. Value and income investors have legitimate reasons to add it to their watchlist. The company’s strategic repositioning under Carol Tomé’s leadership, combined with improving operational metrics and new partnership opportunities, suggests the inflection point may truly be here. The tariff question remains a wildcard, but for patient investors, UPS could deliver solid returns over the next 2-3 years.