Is United Parcel Service, Inc. overvalued or undervalued?

As of 25 April 2025, the valuation grade for United Parcel Service, Inc. has moved from expensive to very attractive, indicating a significant shift in its perceived value. The company appears undervalued, supported by a P/E ratio of 13, which is lower than its peers, such as FedEx Corp. at 11.27 and DoorDash, Inc. at 130.80. Additionally, UPS has an EV to EBITDA ratio of 8.09, compared to FedEx's 6.79, and a robust ROE of 39.52%, suggesting strong profitability relative to equity.
Despite its attractive valuation metrics, UPS has underperformed compared to the S&P 500 over multiple periods, with a year-to-date return of -32.55% versus the index's 12.22%. This trend continues over one year and three years, where UPS has returned -34.90% and -51.87%, respectively, compared to the S&P 500's 17.14% and 70.41%. Such performance highlights a potential disconnect between market perception and intrinsic value, reinforcing the view that UPS is currently undervalued.