On May 29, 2025, JPMorgan upgraded ZTO Express from Neutral to Overweight with a revised price target of $21. This move highlights the firm’s confidence in ZTO’s ability to weather the pricing pressures gripping China’s express delivery sector.
📉 The express delivery market has been battling a 9% year-over-year decline in average selling prices, squeezing margins across the board. However, ZTO’s scale, cost efficiencies, and superior logistics infrastructure have enabled it to maintain profitability where smaller competitors falter. JPMorgan’s analyst noted that ZTO’s strong cash reserves and minimal debt create a cushion, allowing it to thrive even in turbulent times.
📊 Although JPMorgan cut its non-GAAP profit forecast for FY2025 by 12%, it expects earnings to bounce back strongly, projecting around 15% CAGR in FY2026 and FY2027. Currently trading at roughly 9.5x FY2026 earnings estimates, ZTO appears undervalued relative to its historical average, creating a strategic entry point for long-term investors.
💸 ZTO’s dividend fundamentals are also solid. With a forward dividend yield of 4.09% and a sustainable payout ratio of 43.04%, ZTO continues to reward shareholders with reliable income. The latest semi-annual dividend of $0.35 per share was paid out on April 29, 2025, reinforcing management’s commitment to returning capital to shareholders.
ZTO’s upgrade is a recognition of its dominance and resilience in a consolidating market. For investors eyeing stability and yield in the logistics space, this stock now has the backing of one of Wall Street’s largest names.