ZIM Stock Eyes Breakout As Earnings Crush Views Amid Shipping Boom
Recent IPO ZIM Integrated Shipping Services (ZIM) crushed earnings views on rising container volumes and guided significantly higher. ZIM stock jumped near a buy point.
The Israeli shipping liner’s earnings per share shot up to $7.38 from 23 cents in the year-ago quarter. Revenue vaulted 199% to $2.38 billion, driven by an increase in revenue from containerized cargo. Analysts were expecting EPS of $5.71 and sales of $1.91 billion, according to Zacks Investment Research.
Both freight rates and carried volumes rose. ZIM carried 921,000 twenty-foot equivalent units (TEUs) in Q2, up 44% year on year. The average freight rate per TEU was $2,341 in Q2, up 118%.
For fiscal 2021, ZIM now expects to generate adjusted EBITDA of $4.8 billion-$5.2 billion and adjusted EBIT of $4 billion-$4.4 billion. That is up from May’s guidance for adjusted EBITDA of $2.5 billion-$2.8 billion and adjusted EBIT of $1.85 billion-$2.15 billion.
The Haifa-based company expects a stronger second half of the year than the first six months. It also predicted strong dividend payouts.
Shares popped 7% to 48.66 in Wednesday’s stock market trading. ZIM stock is roughly 3% below a 50 buy point from a cup base, according to MarketSmith chart analysis. The relative strength line is rising but below June highs.
Among other shipping stocks, Danaos (DAC), a recent IBD Stock of the Day, rallied 4.7% to 77.17, also nearing a breakout from a 79.59 cup-shaped buy point. Star Bulk Carriers (SBLK) gained 5.2%, and Textainer Group (TGH) added 0.9%.
ZIM stock went public in January amid a container shipping boom. Shipping rates surged amid strong demand for electronics, furniture, bicycles and other goods as consumers rode out the pandemic close to home.
Delays due to overburdened ports and Covid-related disruptions have further stretched industry capacity.
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