United Parcel Service, Inc. (UPS): Just about there on cost out, and while focus is on 2H it should be on carry over to 2027

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United Parcel Service, Inc. (UPS): Just about there on cost out, and while focus is on 2H it should be on carry over to 2027

David Vernon +1 917 344 8333 david.vernon@bernsteinsg.com 21 July 2026

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The market is expecting a modest beat when UPS reports next week, and remains concerned about visibility into 2H. While there

is always the potential for another shoe to drop, the carry-over on recent cost actions for 2027 is considerable and should put

upward pressure on forward estimates as we move through the end of the year.

2Q should be solid. A stronger international market (AI build, pull forwards, DHL read across) and higher fuel (new surcharge

table) have investors expecting modest upside to sell-side consensus, and we would peg the buy-side EPS benchmark for 2Q at

~$1.70. Domestic margins are expected at the midpoint of the range — 8% — and the market may not take fuel for an answer if

they miss (skepticism remains high). We think they do a little better at $1.74 on less volume.

• See revised Amazon glide down math in Exhibit 2. These volume estimates are slightly below sell side consensus and our

previous forecast, and are better aligned with our understanding of the company’s volume trajectory.

• Detailed expectations for the quarter are shown in Exhibit 3. Our EPS number in the quarter is coming down as we pulled

some volume out to better align with our revised glide down math, but we are still expecting a beat to sell / buy side

expectations in the quarter (at $1.67 / $1.70, respectively).

• Revenue per piece builds for Domestic (Exhibit 4) and International (Exhibit 5) show what we have baked in for base rate /

mix, fuel, and currency. We do expect a modestly more material fuel bump in 2Q than we saw in 1Q, but investors should