An independent two-stage DCF analysis by a frontier AI model.
<div class="assumptions-grid"> <div class="assumption-item"> <h3>Growth Rate (Years 1-5): 2.00%</h3> <p>Derived systematically from the historical CAGR of Free Cash Flow over the past reporting periods (bounded between 2% and 15% to smooth pandemic volatility).
<div class="assumptions-grid"> <div class="assumption-item"> <h3>Growth Rate (Years 1-5): 2.00%</h3> <p>Derived systematically from the historical CAGR of Free Cash Flow over the past reporting periods (bounded between 2% and 15% to smooth pandemic volatility).
Intrinsic value per share under varying discount rate and terminal growth rate assumptions.
| WACC ↓ / Terminal → | 1.0% | 1.5% | 2.0% | 2.5% | 3.0% |
|---|---|---|---|---|---|
| 1.0% | $63.87 | $63.87 | $63.87 | $63.87 | $63.87 |
| 1.5% | $63.87 | $63.87 | $63.87 | $63.87 | $63.87 |
| 2.0% | $63.87 | $63.87 | $63.87 | $63.87 | $63.87 |
| 2.5% | $63.87 | $63.87 | $63.87 | $63.87 | $63.87 |
| 3.0% | $63.87 | $63.87 | $63.87 | $63.87 | $63.87 |
■ Undervalued vs current price ■ Overvalued vs current price
UPS stands as a dominant force in global logistics with an unparalleled distribution network and substantial scale advantages. However, the company is currently navigating a challenging transitional period marked by declining revenues, costly new labor agreements, and the need for significant workforce reductions. While its strategic pivot toward high-margin healthcare logistics and disciplined cost management provides a solid foundation, near-term macroeconomic headwinds and intense competition keep its economic prospect moderate.
UPS faces notable top-line pressure with negative revenue growth, though it maintains a dominant market share and continues to expand its high-velocity service offerings through targeted acquisitions.
The company's immense, difficult-to-replicate global physical network creates a formidable economic moat, though its capital-intensive nature inherently limits long-term returns on invested capital.
Sentiment is currently clouded by major workforce reductions and cyclical revenue declines, though management's strategic pivot toward high-margin sectors provides long-term recovery potential.
The 10-Year Treasury yield is widely considered the "risk-free rate" in corporate finance, anchoring the baseline cost of capital and terminal growth limits within mathematical models.
Enterprise Value calculates the value of the firm's core operations. To find the value left for shareholders (Equity Value), we add excess cash and subtract all outstanding debt obligations.
If a company exhibits negative Free Cash Flow due to massive expansion Capex but has positive Operating Cash Flow, the model adapts to use Operating Cash Flow as the normalized proxy to prevent mathematically impossible terminal growth calculations.
Disclaimer: The numbers presented on this page are for educational and entertainment purposes only. They are the result of a deterministic mathematical model fed with assumptions generated by an Artificial Intelligence (Gemini 3.1). This does not constitute investment advice. Always conduct your own due diligence before investing in the stock market.