Here's Why UPS Stock Is a Buy Before July 29

Conversely, Fewer packages are moving through its network, and the dividend is unusually high -- historically high -- but not in a way that inspires confidence

With its next earnings report due on July 29, many investors are bracing for a miss, a dividend cut, or both

Expectations couldn't be lower

But underneath the caution, UPS' margins are showing signs of life, with a management team that's executing on a cost reset that's already changing the math

Nevertheless, With expectations in the basement, UPS might be setting up for the one thing Wall Street isn't pricing in: a measured return to form (something worth watching)

Here's why UPS is a buy before July 29 (fascinating analysis)

Image source: Getty Images (quite telling)

Operating smarter, not bigger Let's start here (noteworthy indeed)

The pandemic-era boom is long gone, and demand for packages has started to normalize (fascinating analysis) (which is quite significant)

On the other hand, That's no secret, in light of current trends

But what's been overlooked is how aggressively UPS is cutting costs to stay fitable in this slower environment

Moreover, This analysis suggests that 's not flashy, but it appears to be working

However, In the first quarter, U (this bears monitoring)

Revenue per package was also up 4

Nevertheless, In other words, UPS is moving fewer packages, but making more on each one -- and that's starting to show up on the balance sheet

UPS data by YCharts Second, UPS is moving away from lower-margin work, and that includes scaling back its relationship with Amazon

Back in January, the company said it plans to cut Amazon deries by 50% by mid-2026

Furthermore, Additionally, CEO Carol Tome summed it up nicely when she said on a call with analysts, "Amazon is our largest customer, but it's not our most fitable customer (an important development)

Furthermore, " Stepping back from Amazon will, in theory, free UPS to prioritize routes and clients that could actually move the needle on fit, given the current landscape

And that's the bigger story: The headline numbers might look flat, but the underlying appears to be moving in the right direction

UPS Dividend Yield data by YCharts The result of this high dividend is that free cash flow (FCF) is being exhausted just to keep the wheels turning, given the current landscape

In short, there's just no breathing room anymore

That's why cutting the dividend on July 29 wouldn't be a disaster (which is quite significant)

Nevertheless, It might, in fact, be the smartest move UPS can make

The reset is already priced in If you're waiting for the perfect quarter, you could be waiting for some time, amid market uncertainty

Moreover, UPS still faces many risks

But all of this is known

In fact, I think it's priced in

On the other hand, The stock trades at just 14. 5 times trailing earnings, and near its pre-pandemic levels

Moreover, That's a steep discount for a company with stable cash flow, rising margins, and path to fitability, in today's financial world

If UPS shows even a whiff of margin expansion or ders a thoughtful dividend reset, the market may respond sharply, considering recent developments

However, Conversely, To be sure, UPS has more work to get its where it needs to be

But with management cutting fat, rebuilding efficiency, and facing reality, it's setting itself up for a rebound

For investors who believe the company vides an essential service, and who are OK taking on some near-term turbulence, UPS might be worth a closer look, in light of current trends.