Is UPS a Smart Buy Below $105? What Investors Need to Know

The Strategic Shift Under Carol Tomé’s Leadership

United Parcel Service (UPS) has been struggling—the stock delivered disappointing returns throughout 2022, 2023, and 2024, continuing into 2025. Yet recent developments suggest the worst might be behind this logistics giant. On October 28, 2025, UPS unveiled its third-quarter earnings, which marked a significant turning point for the company and its leadership under Carol Tomé.

The numbers told a compelling story: while revenue slipped 2.6% year-over-year to $21.4 billion (versus the expected $20.8 billion), the real surprise lay in profitability. UPS delivered adjusted earnings per share of $1.74, crushing the consensus estimate of $1.30. This wasn’t luck—it was the result of aggressive operational restructuring.

Inside the Restructuring: Bold Moves Paying Off

Carol Tomé has made unconventional decisions that are finally yielding results. The company eliminated 34,000 positions in the first nine months of 2025, exceeding its initial target of 20,000 cuts. Management also slashed 14,000 roles in its leadership ranks, signaling a serious commitment to operational efficiency.

Perhaps most notably, Tomé personally engaged with the new Postmaster General to forge a new partnership with the U.S. Postal Service. The outcome: USPS will now handle final-mile delivery while UPS manages the middle-mile transportation layer. This partnership reshapes the competitive landscape for both organizations.

The market responded positively. Since early October, UPS stock has climbed approximately 17%, reflecting investor confidence in management’s strategic pivot.

The Amazon Factor: A Gamble with High Stakes

Carol Tomé characterized UPS’s decision to reduce shipment volumes with Amazon—its largest customer—as “the most significant strategic shift in our company’s history.” This dramatic repositioning could prove transformative if successful, but failure would expose management to considerable criticism.

The reasoning is sound: by reducing reliance on Amazon’s relatively thin margins, UPS aims to focus on higher-margin segments, particularly healthcare logistics. Whether this bet succeeds will define Tomé’s tenure at the helm.

Three Types of Investors, Three Different Outlooks

For Growth Investors: UPS may disappoint. Even with current challenges resolved, the company operates in a mature industry with limited explosive growth potential. This stock isn’t built for aggressive capital appreciation.

For Value Investors: UPS presents an intriguing opportunity. The forward price-to-earnings ratio of 13.6 is appealingly low, and the operational restructuring suggests the company has navigated the worst. With tariff-related headwinds potentially hitting small-to-medium enterprises hard in 2026—Carol Tomé herself warned of this during earnings—UPS’s newfound efficiency could prove advantageous.

For Income Investors: The 6.6% forward dividend yield is genuinely attractive. While the company paid $4 billion in dividends during the first nine months of 2025 despite generating only $2.7 billion in free cash flow, management remains committed to dividend payments. CFO Brian Dykes indicated that free cash flow should “generate significantly more” over time as the Amazon transition matures and higher-margin business grows.

Lingering Uncertainties: Tariffs and Cash Flow Imbalances

Not everything is resolved. The Trump administration’s tariff policies could disrupt UPS’s small-to-medium business customers, the very segment Carol Tomé warned about during the Q3 call. Additionally, the gap between free cash flow and dividend payouts requires monitoring—sustained imbalance would force a dividend reduction.

However, management’s restructuring initiatives and pivot toward healthcare logistics position the company to reverse these pressures over time.

The Verdict: Buy Below $105?

At share prices below $105, UPS merits consideration—but not universally. Value and income investors should take a closer look. The restructuring is real, the partnerships are tangible, and management has demonstrated willingness to make tough calls. Growth investors, meanwhile, might continue waiting for more explosive momentum.

The company has spent three painful years in the wilderness. Under Carol Tomé’s leadership, UPS now has a clearer path forward. Whether you board this recovery depends entirely on your investment style and risk tolerance.