Australia's Zip falls; UBS trims PT on US regulatory uncertainty

Zip Co ZIP.AX falls as much as 2.1% to A$3.015, lowest since December 18

UBS cuts PT by 4% to A$5.2; maintains "buy"

Says last three months saw significant share price underperformance from buy-now-pay-later (BNPL) provider due to evolving U.S. regulatory landscape

Adds U.S. state attorneys general's probe into BNPL firms weighing on stock

Notes recent news on Donald Trump's call for 10% rate cap on annual percentage rate credit cards could be potentially positive for co, as reduced credit availability could drive consumers to BNPL

However, flags if BNPL taxation fees are treated as "interest", Zip's effective "interest" rate on a transaction would be ~24%, above the 10% limit

Sees rate caps unlikely to be implemented; still views fundamentals to remain strong

ZIP rose 11.2% last year