JPMorgan downgraded ZTO Express (ZTO) to Neutral from Overweight with a price target of $23, down from $25. The firm cites the recent share price rebound for the downgrade. While ZTO’s fiscal 2024 results were a beat, the company’s strategic shift to focus more on volume growth is creating challenges by potentially diluting margins and possibly risking its market proposition, the analyst tells investors in a research note. JPMorgan now sees a balanced risk/reward and believes ZTO’s commitment to shareholder returns through repurchase plans and dividends limits absolute downside.
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