Consumer shipping companies such as UPS and rival FedEx (FDX) face threats such as insourcing from e-commerce giants like Amazon.com (AMZN) and last-mile delivery competition, the firm contended, Barron's reports.
Startups could crowdsource last-mile delivery at a local level, which could threaten the companies' ground shipping businesses, the firm continued.
"The threat is real - at the very least, legacy parcels could see pricing pressure and trimmed growth expectations but the worst case scenario is the loss of up to 15%-20% of revenues," Morgan Stanley wrote in a note, Barron's adds.
UPS can either take share and sacrifice price and returns or position itself as the premium business-to-business and international business carrier, though both of these options include risks, according to the firm.
Separately, TheStreet Ratings team rates the stock as a "buy" with a ratings score of B.
UPS' strengths such as its impressive record of earnings per share growth, compelling growth in net income and revenue growth outweigh the fact that the company shows weak operating cash flow.
You can view the full analysis from the report here: UPS
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.