UBS had always suspected that the “no surcharge” rules of the BNPL sector would eventually be prohibited. The Payments System Board has concluded that it would be the public interest if these rules were removed so that merchants can apply a surcharge to payments if they wish.
The broker considers this an incrementally negative development for Zip, noting the company is more reliant on consumer fees to fund its economics.
UBS retains a Sell rating and $5.40 target.
Sector: Diversified Financials.
Target price is $5.40.Current Price is $6.96. Difference: ($1.56) – (brackets indicate current price is over target). If Z1P meets the UBS target it will return approximately -29% (excluding dividends, fees and charges – negative figures indicate an expected loss).