UPS Drops as Analyst Questions Margins

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© Reuters. © Reuters. – UPS slipped Wednesday following an analyst downgrade that raised questions about future margins.

BMO cut the stock to market perform from outperform.

Shares of UPS (NYSE:) dropped 1,4% in midday trading.

“While we believe that UPS may be able to deliver positive operating leverage (excluding the impact of pension) in the near-term as a result of strong volumes and efficiency gains from past/ongoing productivity investments, we’re not convinced a positive trend in operating margins in U.S. domestic operations can be sustained over the medium-term given a significant projected rise in (business to consumer) volumes,” analyst Fadi Chamoun wrote.

UPS is up a little more than 20% year to date.

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