United Parcel Service Inc. shares rose Monday after investment firm Robert W. Baird upgraded UPS, saying the delivery company's performance would improve with a cyclical recovery in the economy.
In midday trading, the shares rose $1.05, or 1.8 percent, to $58.42 in afternoon trading. Earlier in the session, they rose as high as $58.82, near their 52-week high of $59.75.
Baird analyst Jon A. Langenfeld raised his rating on UPS to "Outperform" from "Neutral," saying the company could benefit from higher prices in the package-delivery business and a cyclical economic recovery.
Langenfeld also said the company could improve its financial performance with opportunities to boost profit margins. He said the company had room to increase weight per shipment from low levels, shift a greater share of its business to more lucrative international shipments, and cut costs. Compensation costs should moderate due to terms of a 2007 contract with the Teamsters, he said.
The analyst also said he was encouraged that UPS and rival FedEx have talked about wanting to raise prices this year.
Langenfeld predicted UPS would post "solid" fourth-quarter earnings of 68 cents per share _ that's 5 cents per share higher than the consensus of analysts surveyed by Thomson Reuters _ but gave a "guarded" outlook for this year until business trends are more clear.