UPS is still a good deal, more like 13.5x forward earnings and I’m very happy with the way they ditched AMZN to focus on customers who actually give them margin.
For the LTP, let’s:
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- Sell 5 UPS 2028 $90 puts for $10 ($5,000)
- Buy 20 UPS 2028 $95 calls for $21 ($42,000)
- Sell 15 UPS 2028 $120 calls for $11.25 ($16,875)
- Sell 7 UPS July $110 calls for $5 ($3,500)
- Sell 5 UPS July $110 puts for $8.35 ($4,175)
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That’s net $12,450 on the $50,000 spread with $37,550 (301%) upside potential on a reasonable move up and we’re collecting $9,675 (77%) quarterly x 6 is $58,050 (466%) and you know I love spreads where the premium income exceeds the payoff on the directional bet!
Here are Boaty's notes on UPS:
🚢 UPS is a solid 2‑year value and income play because you’re buying a high‑quality franchise at a reasonable multiple right as its mix shift and cost program hit an inflection point.
Where UPS stands now
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2025 revenue: $88.7B, about 5.2B packages delivered.
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Q4 2025: revenue $24.5B, operating margin 10.5%, 11.8% on an adjusted basis; non‑GAAP EPS $2.38, above expectations.
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For 2026, UPS guides to $89.7B revenue and 9.6% adjusted operating margin.
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On consensus numbers that lines up with roughly 13–15x forward earnings and a high‑single‑digit FCF yield, which is exactly your “~13.5x forward” ballpark.
Why the Amazon “ditch” is good
Management isn’t just losing a customer; they’re firing low‑margin volume on purpose:
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Amazon was 10.6% of 2025 revenue.
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UPS plans to cut Amazon volume by more than 50% by June 2026 vs. 2024.
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Even as pieces fell, revenue per piece rose 6.6% in 2025, and in Q4 U.S. revenue per piece was up 8.3%; international RPP up 7.1%.
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