Where Will UPS Be in 3 Years?

That headline poses an intriguing question, because there are several potential outcomes for (NYSE: UPS) over the next three years, and they differ significantly from each other. As always, management's decisions will have a direct impact on the business' trajectory. So, let's take a closer look at what investors might expect from the company.

Management outlined its plans through 2026 at its investor and analyst day last year. In a nutshell, they involve doubling down on previously successful investments in key end markets -- such as small and medium-sized businesses (SMBs) and healthcare -- and investing heavily in productivity-enhancing technologies (smart facilities, automation, etc.) to build what it calls the "network of the future."

The network investments are not just about increasing productivity and lowering its cost per package; UPS can also close unproductive facilities, since the newly modernized ones can handle delivery volumes previously handled in the facilities to be consolidated. And management was hopeful that the excess capacity in the U.S. small-package market (built up during the boom years of the lockdowns) would disappear as demand picked up and supply growth was tempered.

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Source Fool.com