Jefferies downgrades Australia's Zip to 'hold' on consumer sentiment headwinds

Zip Co

12/05/2025 24:52

** Analysts at Jefferies downgrade Australia's Zip Co ZIP.AX to "Hold" from "Buy", trim price target to A$1.80 from A$3.70

** Brokerage says its survey of more than 1,700 U.S. consumers revealed that Zip had the weakest retention outlook among the 10 buy now pay later (BNPL) brands surveyed

** Jefferies says consensus forecasts for Zip's active user base in the U.S. to grow 28% from Q3 2025 to FY27 are "too high" and sees downside risks to these forecasts

** Brokerage's revised FY26 and FY27 estimates are 13% and 27% below consensus, respectively, reflecting weaker growth outlook and consumer sentiment headwinds

** ZIP closed at A$1.865 on Friday, and is down ~37% YTD

(Reporting by Himanshi Akhand in Bengaluru)

((Himanshi.Akhand@thomsonreuters.com;))