Morgan Stanley Reiterates Overweight Rating on ZTO Express, Sees Valuation Support

Morgan Stanley analysts maintained their Overweight rating and set a $27.70 price target on ZTO Express (NYSE:ZTO) stock. The analysts expressed confidence that ZTO's share price will likely rise in the next 60 days, noting that recent trading dips have made the stock more attractive in terms of valuation. The analysts highlighted the company’s solid cash dividend yield as valuation support and suggested that ZTO might accelerate its share buybacks ahead of interim results.

The analysts also pointed to an impending inflection point in the industry where struggling competitors could face network disruptions, potentially leading to a re-rating of leading companies like ZTO. The analyst estimated a 70% to 80% probability that this scenario will occur, suggesting a favorable outlook for ZTO.