UBS offered new analysis on two top parcel delivery services Monday, downgrading FedEx Corp. (FDX) while upgrading United Parcel Service Inc. (UPS). The ratings firm downgraded FedEx to neutral while lowering its price target to $256 per share from $283 per share, citing concerns about its exposure to “risk from tariffs and potentially slower trade activity.”

Roughly 55% of FedEx’s revenue is derived from its “global Express business.” The delivery company recently acquired TNT Express in a $4.8 billion deal, but UBS analysts said they do not expect benefits from that acquisition to be reflected in the next few quarters.

FedEx shares have declined about 12% since June 15 after a nearly 26% rise in the previous 52 weeks. (See also: FedEx May Soar to New Heights.)

UPS’ Domestic Edge

Meanwhile, UBS raised its near-term rating on UPS to buy, saying that delivery company is in a better position to benefit from domestic trends with “multiple ways to win.” Its price target increased to $125 per share from $121 per share.

UPS is positioned to see improved margin performance and stronger operating income with its UPS Transformation initiative, which aims to increase revenue and reduce costs. UPS also has “network initiatives” that are expected to generate $800 million to $1 billion in cost savings.

“We believe these two programs can support a transition to Domestic Package margin improvement in 2019,” UBS analysts said in a note. (See also: UPS, FedEx to Outperform: Bernstein.)

UPS shares are down 4.5% in the past month, and down about 1% in the past 52 weeks.

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