Goldman Recommends UPS (NYSE:UPS) over FedEx (NYSE:FDX)

The miss by FedEx (NYSE:FDX) in their latest quarter showed the consequences of uncertainty related to the company in several areas. Consequently, Goldman Sachs (NYSE:GS) sees UPS (NYSE:UPS) as a better play at this time.

The disastrous EPS results in their fiscal second quarter for 2011 highlights the challenges facing FedEx. They reported EPS of $1.16, missing significantly the $1.36 the Street was looking for.

Goldman changed their full year 2011-2013 EPS estimates from $5.25/$6.28/$7.09 to $5.23/$6.43/$7.24, citing improved domestic volume/pricing trends, although 2012 was the only year they were increased.

FedEx's performance was based on potential M&A, new fleet investments, domestic China competition/regulation, LTL pressures, and US regulatory/litigation outcomes, said Goldman. Those are things that will take time to work through, creating the uncertaintly and lack of clarity going forward.

Goldman maintains a "Neutral" rating on FedEx, which was trading at $92.59, down $1.63, or 1.73 percent, as of 12:39 PM EST. Goldman raised their price target on them from $100 to $105 based on the Christmas season.