Thomas Chong, an analyst from Jefferies, maintained the Buy rating on ZTO Express (ZTO – Research Report). The associated price target is $33.00.
Thomas Chong gave his Buy rating to ZTO Express’ stock due to a number of reasons. The third quarter results were promising with parcel volume exceeding Jefferies’ estimates by 1.9%. Even though total revenue was slightly behind consensus, the non-GAAP earnings came in as expected. Management’s emphasis on quality, profitability, and market share as key performance indicators was also a positive factor influencing the rating. Moreover, the competitive landscape for ZTO Express is anticipated to remain stable.
In addition, ZTO Express’ diversification strategy, including the introduction of reverse logistics, was seen as a strong point. Despite the market share gain of 1.5 pp not being achievable due to price competition, the full year parcel volume was reaffirmed. The total revenue in the third quarter grew 1.5% YoY and parcel volume saw a significant growth of 18.1% YoY. Moreover, the unit cost per parcel decreased by 16.3% YoY, further boosting profitability. Lastly, the gross profit increased by 10.7% YoY, reinforcing the company’s strong financial performance.
According to TipRanks, Chong is an analyst with an average return of -3.1% and a 32.94% success rate. Chong covers the Communication Services sector, focusing on stocks such as Baidu, Tencent Holdings Limited, and NetEase.
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ZTO Express (ZTO) Company Description:
ZTO Express (Cayman) Inc. is a China-based express delivery services company. The firm provides domestic and international express delivery as well as other value-added logistics services.
Read More on ZTO:
- ZTO Express reports Q3 adjusted EPS 39c, consensus 38c
- ZTO Express options imply 2.8% move in share price post-earnings
- Zto Express (Cayman), Inc. Sponsored Adr Class A (ZTO) Q3 Earnings Cheat Sheet
- ZTO Express downgraded to Neutral at BofA on longer-lasting price competition
- ZTO Express downgraded to Neutral from Buy at BofA
