Fundamentals · UPS
DuPont (ROE Decomposition) for UPS
AI-generated plain-English read of dupont (roe decomposition) for UPS. Updated daily.
Leverage-driven ROE, deteriorating
highROE is falling (4.0%) and leverage of 4.72× is amplifying every problem. When a highly-levered company's ROE deteriorates, the real pain is usually in margins or debt service — check both.
What will probably happen
- ROE has been falling — without a reversal in the weakest leg, the next period will likely show further pressure.
- Elevated leverage (4.72×) is amplifying ROE in both directions. If margins slip, ROE will fall faster than the income statement suggests.
What to do
- If you HOLD this stock
- Leverage (4.72×) is doing the heavy lifting. Hold only if you're comfortable that the debt load is sustainable in a slower earnings environment. Watch interest coverage and free cash flow.
- If you are EVALUATING this stock
- Don't let the headline ROE (4.0%) mislead you — it's primarily a function of 4.72× leverage. A cleaner way to compare this company is on ROIC or on ROA, which strip out the capital structure effect.
- If you trade OPTIONS
- Leverage amplification + deteriorating ROE is structurally bearish. Elevated leverage means the stock can move sharply on bad news — protective puts or put spreads are justified on a fundamental basis, not just sentiment.
36 periods with all three DuPont legs populated — trend reads are reliable.
Technical details
Technical analysis
- Profitability (net margin)
- 2.6% — deteriorating, mixed
- Asset efficiency (turnover)
- 0.32× — stable, healthy
- Leverage (equity multiplier)
- 4.72× — stable, mixed [elevated]
- ROE
- 4.0% — deteriorating
- Primary ROE driver
- Leverage Driven
- Periods analysed
- 36
- Sector context
- not provided
Key levels
| Level | Value |
|---|---|
| latest roe | 0.04 |
| latest margin | 0.026 |
| latest turnover | 0.32 |
| latest em | 4.72 |
| em critical threshold | 5 |
| em high threshold | 4 |