UPS DCF valuation

Deterministic FCFF

UPS's Base DCF, using a trailing-four-quarter revenue baseline through 2026-06-30, estimates $112.73 per diluted share, 12.7% above the $99.99 market reference. The Bear-to-Bull range is $75.09 to $173.54.

Market reference

$99.99

Implied upside

+12.7%

Base case

$112.73

Fair value per share

Scenario range

$75.09–$173.54

Bear to Bull

Enterprise value

$124.17bn

Base DCF

Terminal value

79.4%

Share of enterprise value

Three scenarios

Same engine, explicit assumptions

bear

$75.09

2.7% initial growth, 9.3% EBIT margin, and 7.7% WACC.

base

$112.73

3.1% initial growth, 9.6% EBIT margin, and 6.9% WACC.

bull

$173.54

4.3% initial growth, 9.7% EBIT margin, and 6.3% WACC.

Five-year FCFF forecast

Values in USD billions

Forecast year	Revenue	EBIT	FCFF
FY 2027	92.8	8.9	6
FY 2028	95.6	9.1	6.2
FY 2029	98.3	9.4	6
FY 2030	101	9.7	5.9
FY 2031	103.6	9.9	5.9

Sensitivity matrix

Fair value per share across WACC and terminal growth

WACC \ growth	1.5%	2.0%	2.5%	3.0%	3.5%
4.9%	$180.57	$201.45	$230.84	$275.35	$350.98
5.9%	$132.07	$141.89	$154.49	$171.30	$194.92
6.9%	$101.54	$106.59	$112.73	$120.35	$130.11
7.9%	$80.56	$83.26	$86.40	$90.12	$94.62
8.9%	$65.28	$66.70	$68.29	$70.11	$72.22

Public evidence

Inspectable inputs used by the model

E01

UPS annual report

UPS / SEC · Feb 17, 2026 · Business, risk factors, and audited financial statements

E02

Daily Treasury par yield curve rates

U.S. Department of the Treasury · Sep 9, 2026 · Ten-year Treasury rate, September 2026 daily table

E03

Implied equity risk premium and country-risk update

Aswath Damodaran, NYU Stern · Sep 1, 2026 · Current implied premium, Treasury rate, and U.S. default spread

E04

Trucking industry beta dataset

Aswath Damodaran, NYU Stern · Jan 31, 2026 · Global industry betas, January 2026

E05

UPS senior notes final term sheet

UPS / SEC · Aug 10, 2026 · Pricing spread and expected ratings

E06

Federal Reserve inflation objective

Board of Governors of the Federal Reserve System · Aug 22, 2025 · Longer-run inflation goal

Investor workspace

Turn the public case into your own model

Edit assumptions, save immutable versions, compare Bear/Base/Bull, monitor the next filing, and export the formula-driven workbook.

Open model See Investor plan

Model baseline

$89.93bn

Trailing-four-quarter revenue

Four reported quarters through 2026-06-30: 2026-06-30, 2026-03-31, 2025-12-31, 2025-09-30. Missing opening-balance facts stop publication instead of becoming zero.

Key assumptions

Approved Base case

Initial revenue growth

3.1%

The annual filing's coverage of operating results, competitive conditions, and material business risks supports using the associated forward operating candidate set for the plan scenarios.

EBIT margin

9.6%

The annual filing addresses operating results and the competitive environment, making the associated forward margin candidates an appropriate scenario framework for the plan.

Cash tax rate

22.2%

The audited financial statements in the annual filing provide the relevant historical financial-reporting context for the selected tax-rate candidates.

Capital expenditure

4.5%

The annual filing's discussion of fleet investment and audited financial statements supports anchoring plan capital-expenditure scenarios to the associated historical candidates.

Depreciation & amortization

3.8%

The annual filing's audited financial statements and fleet-investment discussion provide context for the selected depreciation-and-amortization candidates.

Operating working capital

-1.2%

The annual filing's audited financial statements provide the historical financial context for the selected working-capital candidates.

Discount rate

6.9%

The evidence set supplies a Treasury market anchor, a mature-market implied equity risk premium, an industry unlevered beta, and a recent company senior-note spread. Those public market and company-debt inputs support the selected scenario-specific WACC candidates.

Terminal growth

2.5%

The Federal Reserve states a longer-run inflation objective that anchors the nominal terminal-growth envelope.

Terminal marginal ROIC

10.9%

The annual filing's operating and capital-structure context, together with the public market, beta, and debt-spread inputs, supports use of the provided terminal-return persistence scenario candidates.

Reverse DCF

0.9%

The market-implied five-year growth rate is 0.9% when all other Base-case assumptions are held constant.

Model checks

NEGATIVE OPERATING NWCNegative operating NWC is allowed; a further decrease is a source of FCFF and an increase is a use of FCFF.
HIGH TERMINAL VALUE SHAREThe present value of the terminal value exceeds 75% of enterprise value.

Confidence state

The Atlas Confidence Score remains unavailable until its locked calibration study is complete.