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ZTO Express (ZTO) Gains From Parcel Volumes Despite High Expenses
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ZTO Express (ZTO - Free Report) is benefiting from the strong performance of the core express delivery services unit. Revenues from the unit increased 8.8% year over year in fourth-quarter 2022. The uptick was driven by increases of 3.9% and 4.7% in parcel volume and parcel unit price, respectively. The market share of parcel volume grew by 1.5 points to 22.1% in the fourth quarter. With rapid growth in the e-commerce business, ZTO Express’s parcel volume increased recently. ZTO Express expects its 2023 parcel volume between $28.78 billion and $29.75 billion, indicating a year-over-year increase of 18-22%.
We are impressed with ZTO Express’ efforts to reward its shareholders even in the present uncertain scenario. As of Dec 31, 2022, ZTO Express repurchased 36,560,249 American depositary shares at an average purchase price of $25.20. The company’s board of directors further approved changes to its existing share repurchase program, increasing the value of shares to be repurchased from $1 billion to $1.5 billion, and extending the effective time by a year through Jun 30, 2024. The company anticipates funding the repurchases from its existing cash balance.
On the flip side, rising selling general & administrative (SG&A) expenses may hike operating expenses and affect the bottom line. Apart from other factors, increased compensation, benefits and office expenditure is leading to higher SG&A expenses. In fourth-quarter 2022, SG&A expenses increased 18.8% due to a rise in compensation and benefits. Evidently, SG&A expenses rose 10.7% year over year in 2022.
Currently, ZTO Express carries a Zacks Rank #3 (Hold).
Shares of ZTO Express have gained 13.3% over the past six months compared with the 12% rise of the industry it belongs to.
Copa Holdings has an expected earnings growth rate of 39.83% for the current year. CPA delivered a trailing four-quarter earnings surprise of 33.35%, on average.
The Zacks Consensus Estimate for CPA’s current-year earnings has improved 21.1% over the past 90 days. Shares of CPA have risen 32.6% over the past six months.
AAL has an expected earnings growth rate of more than 100% for the current year. AAL delivered a trailing four-quarter earnings surprise of 7.79%, on average.
The Zacks Consensus Estimate for AAL’s current-year earnings has improved 31.1% over the past 90 days. Shares of AAL have gained 13.8% over the past six months.
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ZTO Express (ZTO) Gains From Parcel Volumes Despite High Expenses
ZTO Express (ZTO - Free Report) is benefiting from the strong performance of the core express delivery services unit. Revenues from the unit increased 8.8% year over year in fourth-quarter 2022. The uptick was driven by increases of 3.9% and 4.7% in parcel volume and parcel unit price, respectively. The market share of parcel volume grew by 1.5 points to 22.1% in the fourth quarter. With rapid growth in the e-commerce business, ZTO Express’s parcel volume increased recently. ZTO Express expects its 2023 parcel volume between $28.78 billion and $29.75 billion, indicating a year-over-year increase of 18-22%.
We are impressed with ZTO Express’ efforts to reward its shareholders even in the present uncertain scenario. As of Dec 31, 2022, ZTO Express repurchased 36,560,249 American depositary shares at an average purchase price of $25.20. The company’s board of directors further approved changes to its existing share repurchase program, increasing the value of shares to be repurchased from $1 billion to $1.5 billion, and extending the effective time by a year through Jun 30, 2024. The company anticipates funding the repurchases from its existing cash balance.
On the flip side, rising selling general & administrative (SG&A) expenses may hike operating expenses and affect the bottom line. Apart from other factors, increased compensation, benefits and office expenditure is leading to higher SG&A expenses. In fourth-quarter 2022, SG&A expenses increased 18.8% due to a rise in compensation and benefits. Evidently, SG&A expenses rose 10.7% year over year in 2022.
Currently, ZTO Express carries a Zacks Rank #3 (Hold).
Shares of ZTO Express have gained 13.3% over the past six months compared with the 12% rise of the industry it belongs to.
Image Source: Zacks Investment Research
Investors interested in some better-ranked stocks from the Zacks Transportation – Airline industry can consider Copa Holdings, S.A. (CPA - Free Report) and American Airlines (AAL - Free Report) . Copa Holdings presently sports a Zacks Rank #1 (Strong Buy) and American Airlines carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Copa Holdings has an expected earnings growth rate of 39.83% for the current year. CPA delivered a trailing four-quarter earnings surprise of 33.35%, on average.
The Zacks Consensus Estimate for CPA’s current-year earnings has improved 21.1% over the past 90 days. Shares of CPA have risen 32.6% over the past six months.
AAL has an expected earnings growth rate of more than 100% for the current year. AAL delivered a trailing four-quarter earnings surprise of 7.79%, on average.
The Zacks Consensus Estimate for AAL’s current-year earnings has improved 31.1% over the past 90 days. Shares of AAL have gained 13.8% over the past six months.