ZTO Express Gains 3% On Revised Share Buyback Plan


Shares of ZTO Express increased 2.7% to close at $29.15 on March 31 after the Chinese express delivery company announced an increase as well as the extension of its stock repurchase program, which was launched in Nov. 2018.

The repurchase program of ZTO Express (ZTO) has been upsized by $500 million to $1 billion and extended by two years through June 30, 2023. Notably, one Class A share of ZTO Express is equal to one American depositary share (ADS).

Last month, ZTO Express reported 4Q results. The company’s adjusted earnings per ADS came in at $0.24 (RMB 1.55), missing the consensus estimate by $0.03. Total revenue was $1.26 billion (RMB 8.26 billion), which fell short of analysts’ expectations of $1.25 billion. (See ZTO Express stock analysis on TipRanks)

On March 22, J.P. Morgan analyst Lin Chen downgraded the stock to Hold from Buy and maintained a price target of $30 (2.9% upside potential).

In a note to investors, Chen said that the company is seeking long-term gain at the expense of “short-term pain.”

The consensus rating among analysts is a Strong Buy based on 3 Buys versus 1 Hold. The average analyst price target stands at $35.18 and implies upside potential of 20.7% to current levels. Shares have gained almost 11% over the past year.

TipRanks’ Hedge Fund Trading Activity tool shows that confidence in ZTO Express is currently Very Positive, as 4 hedge funds increased their cumulative holdings of the stock by 1.2 million shares in the last quarter.

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