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United Parcel Service (UPS) popped after Q3 2025 earnings today, but many are skeptical whether or not this is a genuine turnaround. The stock has been struggling for nearly five years after the initial post-pandemic boom turned into a slow bleeding.

UPS has had a litany of issues to solve. U.S. revenue declined from $14.6 billion in the prior-year quarter to $14.22 billion, with adjusted operating profits remaining basically flat. Consolidated revenue came in at $21.4 billion for the whole company.

The international segment is showing growth, though with lower margins. Q4 guidance sets revenue at $24 billion with non-gap adjusted operating margin of ~11.25% at the midpoint. This means full-year revenue should be $87.8 billion, again a decline from 2024.

There’s light at the end of the tunnel as analysts expect this to be the final year of decline before the company posts revenue and earnings growth starting in 2026. The company is deepening job cuts, with 48,000 workers being shed this year. This is why profits were pushed above estimates and the stock popped.

Revenue growth is expected to be 0.2% and accelerate afterwards, with EPS recovering 9.62% to $7 in 2026. I expect the stock to move with the earnings.

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Why UPS stock remains a buy

The biggest draw to the stock is the fat dividend yield. The forward yield now is 7.35%, and the payout ratio is still healthy at 86.62%. There have been 15 years of dividend growth on record, with the 5-year dividend growth rate at 10.42%.

I expect UPS stock to move towards $150 in the next two years as interest rate cuts make that yield more juicy and the company’s growth metrics turn positive. I see it as a bargain below $100.

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