Analysts view Australia's Zip equity raising as positive

Zip Co

17/07/2024 06:29

** Analysts at Citi see financial services firm Zip Co's
 ZIP.AX  equity raising of A$217 mln ($146.17 mln) as
"opportunistic" 
    ** It makes sense to use the proceeds to retire expensive
corporate debt, analysts say
    ** Ord Minnett sees consensus revenue and earnings forecasts
to be improved on the back of co's quarterly update and capital
raising
    ** Ord Minnett notes that the June quarterly trading update
was above its expectations, albeit slightly lower on a revenue
margin front
    ** Zip posts total operating revenue of A$223.6 mln for the
quarter with a revenue margin of 8.6% vs Ord Minnett estimate of
9%
    ** Citi expects the strong performance in the U.S. to
continue as Zip talks to a strong merchant and partner pipeline
in the U.S. 
    ** Avg rating of seven analysts, including Ord Minnett's, an
equivalent of "buy"; their median PT is A$1.40 - LSEG data
    ** Stock has risen 152% this year, as of last close

   ($1 = 1.4846 Australian dollars)

 (Reporting by Sneha Kumar in Bengaluru)
 ((Sneha.Kumar@thomsonreuters.com;))