UBS believes the BNPL sector has been a material beneficiary of economic stimulus and is wary that the short-term outlook is uncertain as policy measures are wound back.
Zip Co produced another strong quarter of top-line metrics, the broker notes, although cost items were not disclosed. In Australasia total transaction value grew 61% and active customers increased by 4%.
Quadpay transaction value growth of 234% was slightly ahead of forecasts. UBS lifts second half transaction value forecasts for Quadpay by 13%.
UBS retains a Sell rating and raises the target to $6.50 from $6.40.
Sector: Diversified Financials.
Target price is $6.50.Current Price is $9.73. Difference: ($3.23) – (brackets indicate current price is over target). If Z1P meets the UBS target it will return approximately -50% (excluding dividends, fees and charges – negative figures indicate an expected loss).