Latest Developments:
UPS reported 3Q24 revenues of $22.24 billion, up 5.6% YoY, with net margins improving to 6.92%. Despite macroeconomic challenges, UPS has seen strong growth in its U.S. domestic segment and is benefiting from its cost-saving initiatives.

Investment Case:
UPS is focusing on margin expansion through its Fit to Serve and Network of the Future initiatives, aiming for $1 billion in savings and $3 billion annually by 2028. These initiatives, along with the strength in the domestic market, should help mitigate revenue declines and enhance profitability.

Valuation:
Based on a conservative growth model and margin improvements, UPS's implied share price is $172, offering a potential 30% upside. This reflects the company's solid cost-saving measures and margin expansion despite potential challenges like tariffs and macroeconomic headwinds.

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