United Parcel Service Inc. (UPS - Get Report) rose on Thursday, Sept. 27, after KeyBanc analysts said the package delivery company was poised to benefit from a stable macroeconomic background, although trade tensions could disrupt trends.

KeyBanc Capital Markets analysts Todd Fowler and Mario Montoya initiated coverage with a sector weight rating. Their coverage began after the Atlanta-based company detailed its transformation plan, including its four strategic imperatives: Expansion of high-growth international markets; growing business-to-business and business-to-consumer e-commerce; further penetration of the healthcare and life sciences logistics market; and enhancing services for small- and medium-sized businesses. The plan also includes more than 70 expansion projects for package facilities and the opening of seven new "super hub" automated sortation facilities that will be a 30% to 35% increase in efficiency than comparable less-automated facilities.

The plan is expected to result in approximately $1 billion of costs savings and increase adjusted earnings per share in the range of $1 to $1.20 by 2022. The company expects charges of $550 million to $750 million for the transformation initiatives.

"We view UPS as positioned to benefit from a stable macroeconomic backdrop, including the domestic freight market, as well as secular supply-chain shifts," Fowler and Montoya wrote in a Sept. 26 research note. "Additionally, benefits from transformation initiatives could improve competitive positioning and margins, while favorable free cash supports capital deployment intermediately."

The analysts said their fundamental outlook is supported by steady end-market demand domestically, generally lean inventories and tight capacity.

Even amid a stable macroeconomic backdrop, the KeyBanc analysts cautioned that "discord around global trade, including protectionist trade policies, could impact trends, while margin improvement may be gradual to unfold."

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Given the current trade tensions, including the U.S.-China trade dispute and the North American Free Trade Agreement negotiations, CEO David Abney earlier this month said the company advocates with governments throughout the world about trade policies.

"We certainly agree that trade needs to be balanced and needs to be fair, but we also think that the globalization in trade really improves society as a whole," Abney said.

The CEO said he worries about tariffs and counter-tariffs, but "when you can't shape the [trade] rules, [we] use our technology and flexibility to operate within those rules."

Shares of UPS rose about 0.5% to $117.26 at 12:30 p.m. New York time. The stock has fallen 2% year to date.

UPS is ramping up for the peak holiday season and plans to hire 100,000 workers, Scott Price, chief strategy and transformation officer, told TheStreet in an interview.

The company said last year that shipments surged beyond network capacity during the holiday season, costing about $125 million.

There are 12 buys, 16 holds and two sell ratings on the stock, according to Bloomberg data.

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