Don't Worry About Amazon, UPS Has Plenty of Growth Prospects
Despite being a company with a $174 billion market cap, UPS (NYSE: UPS) Is sometimes misunderstood. For example, one common line of thought is that Amazon.com's (NASDAQ: AMZN) expansion of its delivery network will eat into revenue and profits at UPS and FedEx (NYSE: FDX). However, the recent investor day presentations from UPS went a long way to easing investor fears. Let's take a look at why.
It's no secret that Amazon is expanding its delivery network, and that's caused some disruption at UPS and FedEx. Indeed, FedEx has ended contracts with Amazon, and UPS has had to adjust its business strategy in response -- its focus on the small and medium-sized (SMB) market for growth is one example.
The concerns aren't just about Amazon taking revenue; there's also the fear that UPS and FedEx margins will come under concerted pressure as they chase e-commerce delivery growth. Moreover, the need to continually invest in expanding their networks could constrain cash flow growth.
Source Fool.com
