Citi cuts PT for Australia's Zip on US growth risks

Zip Co

30/03/2026 20:37

** Analysts at Citi lower price target for Zip Co ZIP.AX by 40% to A$2.60; reiterate "buy" rating

** Citi says higher-than-expected losses in 'Pay in 8' model raised questions on whether ZIP should slow growth in U.S. with consumer spending and bad debts concerns, further exacerbated by higher oil prices

** In Q3, expect higher net bad debts to be more than offset by higher revenue yield and lower funding costs and expect improvement in net transaction margin to 3.8%, Citi says

** However, brokerage estimates FY26 cash EBTDA of A$252 million, which is in-line with ZIP's 2H26 cash EBTDA guidance at least as much as 1H26

** Nine out of nine analysts rate stock "buy" or higher; set median PT at A$4.20 - data compiled by LSEG

** ZIP down 54.9% YTD

 (Reporting by Keshav Singh Chundawat in Bengaluru)

 ((Keshav.singhchundawat@thomsonreuters.com))