Deutsche Bank downgrades UPS to Hold, now prefers FedEx

Deutsche Bank analyst Amit Mehrotra downgraded UPS (UPS) to Hold from Buy with a price target of $221, down from $253. After the 120% increase in shares since the upgrade to Buy 21 months ago, the stock’s risk/reward is better balanced, Mehrotra tells investors in a research note. The analyst now prefers FedEx (FDX) over UPS given the former’s “severe” underperformance year-to-date and UPS’s upcoming renegotiation with its union. The upcoming contract negotiation between UPS and the Teamsters “has potential to be the most tumultuous since the 15-day UPS work stoppage in 1997,” Mehrotra contends.

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