Shares of United Parcel Service Inc. rallied 1.4% in morning trade Monday, after UBS analyst Thomas Wadewitz turned bullish on the package delivery service, citing improving costs and productivity levers at a time of low expectations. At the same time, Wadewitz downgraded UPS rival FedEx Corp. citing uncertainty over the margin outlook, sending the shares down 1.1%. Wadewitz raised his rating on UPS to buy from neutral, and his stock price target to $125 from $121. “We expect UPS’s transformation initiative to general significant cost savings which are additive to the expected $800 million-$1 billion from network initiatives,” Wadewitz wrote in a note to clients. For FedEx, he cut his rating to neutral from buy and his price target to $256 from $283. “Macro risk and limited visibility to near-term margin expansion, but also lack of visibility to improving [free cash flow], drive our downgrade to neutral,” Wadewitz wrote. Shares of both UPS and FedEx have lost 7.3% year to date, while the Dow Jones Transportation Average has slipped 1.4% and the Dow Jones Industrial Average has tacked on 1.2%.