Citi upgrades view on Aussie buy-now-pay-later Zip on likely growth in US

Zip Co

12/03/2024 03:35

** Citi analysts hike their view on Australian
buy-now-pay-later firm Zip Co Ltd  ZIP.AX  to "buy" from
"neutral", raises price target to A$1.40 from A$0.78
    ** ZIP trading 8.9% higher at A$1.3125 as at 0301 GMT;
hovering around its highest level since mid-August 2022
    ** Citi hikes its FY25-26 total transaction value forecast
on the back of likely strong growth in the United States
    ** Brokerage expects higher revenue yield and lower funding
costs in the United States to offset increase in net bad debt
    ** Forecasts net transaction margin to rise to 3.6% in 2H24
from 3.5% in 1H24
    ** Three of six analysts rate the stock "buy" or higher, two
"hold" and one "sell"; their median PT is A$0.90 – LSEG data
    ** ZIP has jumped ~90% this year, as of last close

 (Reporting by Sameer Manekar in Bengaluru)
 ((Sameer.Manekar@thomsonreuters.com; Twitter: https://twitter.com/sameer_manekar))