Wang & Lee Group board approves 250-to-1 reverse share split
On Wednesday, Jefferies analyst Thomas Chong adjusted the price target for ZTO Express (NYSE:ZTO) to $21.00, a decrease from the previous target of $24.00. Despite this change, the firm continues to recommend a Buy rating for the stock. According to InvestingPro data, ZTO is currently trading near its 52-week low of $16.34 and appears undervalued based on Fair Value analysis. The revision followed ZTO Express’s first-quarter financial results, which revealed revenues and non-GAAP earnings that did not meet the consensus expectations.
ZTO Express’s parcel volume for the first quarter also fell short of Jefferies’ forecasts, and the average selling price (ASP) was reported to be weaker than anticipated. Nevertheless, the company’s management has reiterated its commitment to achieving the full-year parcel volume target for 2025. The company maintains strong fundamentals with a 15.26% revenue growth and healthy profit margins of 31%.
The company is experiencing a rapid increase in retail parcels, especially in the area of reverse logistics volumes. This growth trend is a positive sign in the context of the logistics and delivery sector.
Furthermore, ZTO Express is expected to see improvements in cost efficiency. A major strategic initiative contributing to this improvement is the company’s focus on direct linkage, which is likely to streamline operations and reduce expenses.
Chong’s statement on maintaining the Buy rating while lowering the price target reflects adjustments made to earnings assumptions based on the company’s recent performance. The new price target of $21.00 takes into account the lower-than-expected financial results from the first quarter, balanced against the firm’s positive outlook on ZTO Express’s operational initiatives and growth prospects in the logistics market.
In other recent news, ZTO Express reported its first-quarter 2025 financial results, which fell short of analyst expectations. The company posted adjusted earnings per American depositary share of RMB2.71 ($0.37), missing the consensus estimate of RMB2.93. Revenue for the quarter increased by 9.4% year-over-year to RMB10.89 billion ($1.50 billion), falling below the projected RMB11.68 billion. Despite a 19.1% year-over-year increase in parcel volume to 8.54 billion packages, the average selling price per parcel declined by 7.8% due to heightened competition. ZTO’s adjusted net income saw a modest rise of 1.6% to RMB2.26 billion ($311.3 million). The company maintained its full-year 2025 parcel volume guidance of 40.8 billion to 42.2 billion packages, representing a 20-24% year-over-year growth. CFO Huiping Yan highlighted that cash flow from operations was RMB2.4 billion, with capital spending totaling RMB2 billion. Additionally, ZTO extended its share repurchase program through June 2026, with $771.7 million remaining under the current $2 billion authorization.
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