ZIM Integrated Shipping Services (ZIM – Research Report), the Industrials sector company, was revisited by a Wall Street analyst today. Analyst Muneeba Kayani from Bank of America Securities remains neutral on the stock and has a $10.50 price target.
Muneeba Kayani has given a Sell rating due to a combination of factors affecting ZIM Integrated Shipping Services. The recent disruptions in the Red Sea have caused a significant spike in spot rates, which although might suggest an upside in the short term, also brings considerable uncertainty regarding when conditions will normalize. With a lack of clarity on the situation and a potential normalization post-Chinese New Year, the outlook remains skewed. Despite a raised EBITDA estimate for 2024, the potential for the stock price is still seen as limited, leading to an underperform stance with a target price of $10.50, which implies a downside from the current price.
Furthermore, Kayani anticipates that ZIM is likely to face challenges reaching profitability with an EBIT forecast that is close to breakeven for the year 2024. This forecast comes after adjusting expectations to a less severe decline in average freight rates and accounting for a modest volume growth. Additionally, given the projection of a net loss in 2023 and ZIM’s dividend policy, it is unlikely that the company will be able to offer dividends from the 2023 earnings. With a leverage ratio expected to increase beyond recommended levels, the potential for shareholder returns through special dividends or buybacks also seems doubtful, further contributing to the Sell recommendation.
According to TipRanks, Kayani is ranked #6595 out of 8579 analysts.
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ZIM Integrated Shipping Services (ZIM) Company Description:
ZIM Integrated Shipping Services Ltd is an asset-light container liner shipping company. It offers tailored services, including land transportation and logistical services, specialized shipping solutions, including the transportation of out-of-gauge cargo, refrigerated cargo, and dangerous and hazardous cargo. Its services include Cargo Services, Digital Services, Schedules, and Shipping Trades & Lines.
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