Bond.az - Morgan Stanley raised its price target on ZTO Express (NYSE:ZTO) to $30.10 from $28.50 while maintaining an Overweight rating. Shares currently trade at $23.55.
The firm increased its adjusted net profit forecast by 5.4% for 2026 and 5.3% for 2027, implying 21% and 16% year-over-year growth, respectively.
Morgan Stanley's 2026 earnings estimate is 8.5% above consensus. The end-2026 target of $30.10 implies approximately 14 times the 2026 estimated P/E ratio.
The firm expects ~10% year-over-year volume growth in Q2 2026, with adjusted net profit of about 2.9 billion yuan, a 40% increase from a low base.
Morgan Stanley notes ZTO's current valuation at 11x P/E reflects market skepticism about sustained profit growth. The actual P/E is 14.33. The firm believes earnings revisions and valuation expansion will continue, supported by management's aggressive share buyback and a "GREAT" financial health score.
