Wells Fargo Starts UPS (UPS) at Market Perform; Macro Headwinds Likely Constrain Upside

Wells Fargo initiates coverage on UPS (NYSE: UPS) with a Market Perform. PT range $80-$82.

Wells analyst said, "In our view, UPS is both a beneficiary and facilitator of global trade and e-commerce, which we believe supports intermediate-term earnings objectives. However, in the near term, we expect macro economic headwinds in Europe and Asia to constrain multiples and any favorable earnings variance. While the shares are not expensive from a historical perspective, we find it difficult to see multiples expand relative to 10-15% growth objectives or the added risk of further easing in global economic growth. All else being equal, we prefer a better entry point on the shares."

"Our 2011E and 2012E EPS are $4.23 and $4.75 versus the Street at $4.22 (guidance $4.15-4.40) and $4.80, respectively."

For an analyst ratings summary and ratings history on UPS click here. For more ratings news on UPS click here.

Shares of UPS closed at $73.84 yesterday.

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