10:57 AM EDT, 07/02/2025 (MT Newswires) -- ZTO Express ( ZTO ) is expected to have "significantly narrowed" its market share losses in Q2 following five consecutive quarters of losing market share due to "aggressive competition" from smaller rivals, Morgan Stanley said in a Wednesday note.
The brokerage said the delivery and logistics firm likely delivered 17.7% year-over-year volume growth in Q2.
Morgan Stanley said the company's competitors may be starting to lose momentum due to network and cash flow constraints, allowing ZTO to regain traction.
Despite a volume recovery, Q2 non-GAAP net profit is expected to decline 19% year-over-year to 2.3 billion renminbi ($321 million), partly due to timing effects related to government grants. Excluding that impact, Q2 adjusted net profit is expected to fall around 15%, Morgan Stanley said.
The firm trimmed its 2025, 2026, and 2027 EPS forecast by 3.5%, 3.8%, and 4.1%, respectively, citing slower-than-expected growth in the first four months of the year, according to the note.
Morgan Stanley maintained an overweight rating on the stock and raised its price target to $24.60 from $24.20.
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