Better Buy: Tesla or UPS?
Tesla (NASDAQ: TSLA) and UPS (NYSE: UPS) might appear odd comparators, but their investment propositions share a few things in common. They are both cyclical companies. As such, their near-term earnings and cash-flow prospects were negatively impacted by rising interest rates. In addition, the investment theses for both rest on the answers to the same two questions: How will the company emerge from this period of economic uncertainty, and what is management doing to position it for growth?
Rising interest rates make the cost of borrowing more expensive. That's not good news for automakers, as most people take out loans to buy new cars. It's also not good news for package delivery companies like UPS because it curtails economic activity, resulting in lower demand for deliveries.
It also leads to customers looking to shift to cheaper options. I'll get back to this point regarding Tesla in a moment, but first, here's a look at how these phenomena have played out with UPS so far this year.
Source Fool.com
United Parcel Service Inc. Stock
The stock is one of the favorites of our community with 27 Buy predictions and 4 Sell predictions.
With a target price of 102 € there is a slightly positive potential of 11.43% for United Parcel Service Inc. compared to the current price of 91.54 €.
