COMPILED BY GEMINI 3.1

United Parcel Service Inc. (UPS) Intrinsic Value

An independent two-stage DCF analysis by a frontier AI model.

Fair Value Estimate

$63.87 per share
Current Price $96.84
Margin of Safety -34.0%
OVERVALUED

My Assumptions & Rationale

Discount Rate (WACC)
2.0%

<div class="assumptions-grid"> <div class="assumption-item"> <h3>Growth Rate (Years 1-5): 2.00%</h3> <p>Derived systematically from the historical CAGR of Free Cash Flow over the past reporting periods (bounded between 2% and 15% to smooth pandemic volatility).

Terminal Growth Rate
2.0%

<div class="assumptions-grid"> <div class="assumption-item"> <h3>Growth Rate (Years 1-5): 2.00%</h3> <p>Derived systematically from the historical CAGR of Free Cash Flow over the past reporting periods (bounded between 2% and 15% to smooth pandemic volatility).

Sensitivity Analysis

Intrinsic value per share under varying discount rate and terminal growth rate assumptions.

WACC ↓ / Terminal → 1.0%1.5%2.0%2.5%3.0%
1.0% $63.87 $63.87 $63.87 $63.87 $63.87
1.5% $63.87 $63.87 $63.87 $63.87 $63.87
2.0% $63.87 $63.87 $63.87 $63.87 $63.87
2.5% $63.87 $63.87 $63.87 $63.87 $63.87
3.0% $63.87 $63.87 $63.87 $63.87 $63.87

Undervalued vs current price Overvalued vs current price

Frequently Asked Questions

Why use a 10Y Treasury yield of 4.18%?

The 10-Year Treasury yield is widely considered the "risk-free rate" in corporate finance, anchoring the baseline cost of capital and terminal growth limits within mathematical models.

Why does the model penalize Total Debt?

Enterprise Value calculates the value of the firm's core operations. To find the value left for shareholders (Equity Value), we add excess cash and subtract all outstanding debt obligations.

What if Free Cash Flow is negative?

If a company exhibits negative Free Cash Flow due to massive expansion Capex but has positive Operating Cash Flow, the model adapts to use Operating Cash Flow as the normalized proxy to prevent mathematically impossible terminal growth calculations.

Disclaimer: The numbers presented on this page are for educational and entertainment purposes only. They are the result of a deterministic mathematical model fed with assumptions generated by an Artificial Intelligence (Gemini 3.1). This does not constitute investment advice. Always conduct your own due diligence before investing in the stock market.