United Parcel Service (UPS) shares tumbled 15% at the cash open, marking the stock's largest intraday decline in decades and putting it on track for its lowest level since July 2020. The selloff follows a dismal 2025 revenue forecast and news that the company plans to slash 50% of its shipping volume with Amazon by the second half of 2026. 

What has fueled the decline in UPS shares is its agreement, in principle, with its largest customer, Amazon, to reduce shipping volume by more than 50% in the second half of 2026.

"We are making business and operational changes that, along with the foundational changes we've already made, will put us further down the path to becoming a more profitable, agile and differentiated UPS that is growing in the best parts of the market," UPS Chief Executive Carol Tomé.

UPS said reconfiguring its network will save about $1 billion. 

Evercore ISI analyst Jonathan Chappell told clients while the fourth-quarter results had some positives, the bears were more focused on the deal with Amazon. 

"Even though the SurePost insourcing agreement was well known, though not clear on impact, the agreement with [Amazon] to reduce volumes by more than 50% in 18 months is a surprise and acceleration of the glide down of this business that has long represented a tail risk," Chappell said. 

Here's a snapshot of fourth-quarter earnings (courtesy of Bloomberg): 

Adjusted EPS $2.75 vs. $2.47 y/y, estimate $2.53

• EPS $2.01 vs. $1.87 y/y

Revenue $25.3 billion, +1.5% y/y, estimate $25.39 billion

US package revenue $17.31 billion, +2.3% y/y, estimate $17.24 billion

International package revenue $4.92 billion, +6.9% y/y, estimate $4.83 billion

Supply Chain Solutions revenue $3.07 billion, -9.7% y/y, estimate $3.35 billion

• Average daily package volume 26.11 million, +0.9% y/y, estimate 26.47 million

• Total package volume 1.62 billion, -0.7% y/y, estimate 1.65 billion

• Average revenue per package $13.44, +2.5% y/y, estimate $13.33

• Adjusted operating margin 12.3% vs. 11.2% y/y, estimate 11.5%

• Total operating expenses $22.38 billion, -0.3% y/y, estimate $22.4 billion

2025 Forecast: 

Other analysts commentary (courtesy of Bloomberg):

JPMorgan analyst Brian Ossenbeck (neutral)

Jefferies analyst Stephanie Moore (buy)

BMO analyst Fadi Chamoun (outperform)

Goldman analyst  (buy)

The question is whether the selloff is overdone...