Key Takeaways ZTO benefits from upward EPS estimate revisions, with current-year forecasts raised over the past 60 days. ZTO shares jumped 12.1% in 90 days, easily outperforming the transportation services industry's gains. ZTO saw Q3 parcel volume rise 9.8% Y/Y, with express delivery revenues up 11.6%, lifting overall growth.ZTO Express Cayman (ZTO) is bolstered by its robust operational efficiency. The company’s strong liquidity is also encouraging. Due to these tailwinds, ZTO shares have performed impres ...

Market Overview - The equity markets experienced significant volatility due to strong quarterly performances from some blue-chip tech firms being overshadowed by concerns over the rising valuations of AI companies [1] - Experts predict that the growth of AI firms may not justify the substantial investments, potentially leading to a market correction [1] - The U.S. government shutdown has reached a record 38 days, contributing to investor uncertainty and increased market volatility [1] Economic Conditions - The U.S. economy showed signs of weakness with 153,000 job cuts in October, the highest for that month in 22 years, raising concerns about labor market conditions [2] - Investors are adopting a cautious "wait-and-see" approach, focusing on "cash cow" stocks that provide higher returns [2] Investment Metrics - Return on Equity (ROE) is highlighted as a crucial metric for assessing a company's financial health and efficiency in generating profits [3][4] - A high ROE indicates effective reinvestment of cash at a high rate of return, distinguishing profitable companies from less efficient ones [3][4] Stock Screening Criteria - Stocks are screened based on parameters such as Cash Flow greater than $1 billion and ROE exceeding the industry average [5] - Additional criteria include Price/Cash Flow lower than the industry average and Return on Assets (ROA) greater than the industry average [6] - A 5-Year EPS Historical Growth greater than the industry average is also considered to ensure continued earnings momentum [6] High-ROE Stocks - TE Connectivity, ZTO Express, Corning, Banco Bilbao, and VICI Properties are identified as high-ROE stocks that offer resilient investment options [7] - TE Connectivity has a long-term earnings growth expectation of 10.7% and a trailing four-quarter earnings surprise of 6.5% on average, with a Zacks Rank of 2 [9] - ZTO Express has a long-term earnings growth expectation of 1.7% and also carries a Zacks Rank of 2 [11] - Corning has a long-term earnings growth expectation of 18.2% and a trailing four-quarter earnings surprise of 4.1% on average, with a Zacks Rank of 1 [12] - Banco Bilbao has a long-term earnings growth expectation of 12% and a trailing four-quarter earnings surprise of 5.7% on average, with a Zacks Rank of 2 [13] - VICI Properties has a long-term earnings growth expectation of 4.2% and a trailing four-quarter earnings surprise of 0.4% on average, with a Zacks Rank of 2 [15]

Group 1 - FedEx Corporation reported solid growth in adjusted operating income and margin expansion for FY25, achieving a two-year $4 billion DRIVE target and adhering to a $2.2 billion structural cost reduction commitment [2][3] - The company reduced capacity on the Asia-to-Americas lane by more than 35% in May 2025 to effectively match demand [2] - FedEx issued €500 million in 3.5% Notes due in 2032 and €350 million in 4.125% Notes due in 2037, which are expected to positively impact its financial structure and operations [3] Group 2 - The company appointed Vishal Talwar as Chief Digital and Information Officer and President of FedEx Dataworks, effective August 15 [3] - FedEx has gained the trust of 67 hedge funds, indicating strong institutional interest that attracts stable income-seeking investors in the freight sector [4] - The stock value of FedEx is projected to increase by approximately 18.57% over the next year [4] Group 3 - FedEx specializes in transportation, e-commerce, and business services, and is recognized as a global leader in the express delivery industry with its "hub and spoke" logistics network [5]

Core Insights - ZTO Express is set to report its second-quarter 2025 results on August 19, with earnings estimated at $1.55 per share, reflecting a 7.2% decline from 2024 actuals, while revenues are projected to reach $6.83 billion, indicating an 11.1% increase from 2024 [1] Group 1: Financial Performance - The company's bottom-line performance is expected to be negatively impacted by high operating expenses, despite strong parcel volumes driving top-line growth [2] - ZTO Express reported first-quarter 2025 earnings of 37 cents per share, matching the previous year's quarter, but total revenues of $1.50 billion fell short of the Zacks Consensus Estimate of $1.67 billion [4] Group 2: Market Conditions - The ongoing trade war between the United States and China is anticipated to affect the upcoming quarter's results [3][10] - Parcel volumes are forecasted to increase by 20-24% in 2025, which is expected to enhance ZTO's top-line growth, although revenues from freight forwarding services may decline due to weak demand [10] Group 3: Competitive Landscape - ZTO currently holds a Zacks Rank of 4 (Sell), indicating a less favorable outlook compared to other companies in the sector [5]