ZIM Integrated Shipping Services Ltd. (NYSE:ZIM) is slated to release its third quarter Fiscal 2022 results on November 16, before the market opens.
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Based in Israel, Zim Integrated Shipping Services is an international cargo shipping company that offers tailored services, including land transportation, logistical services, and specialized shipping solutions.
Wall Street expects ZIM to post adjusted earnings of $9.40 per share in Q3. The expected Q3 EPS is lower than the prior-year earnings of $12.16 per share. Meanwhile, revenue is pegged at $3.18 billion, representing a year-over-year growth of 1.3%.
It’s worth noting that the company has a strong track record when it comes to its earnings reports. It has beaten the street’s estimate in five out of the last seven reported quarters.
The Bulls and The Bears
Despite macro uncertainty in the current year, ZIM has consistently grown its quarterly dividend payout. At present, ZIM’s TTM dividend yield is 100.07%, which is significantly higher than that of its peer group.
On top of that, there’s a strong chance of a dividend increase in the coming months. According to the company’s payout policy, for Q4, the company may pay in the range of 30% to 50% of net income.
On the downside, the shipping industry presents an uncertain outlook based on a fall in shipping rates as well as volumes. If the Fed goes easier on interest rate increases in the coming months, the shipping industry may recover.
Is ZIM Stock a Buy, Hold or Sell?
According to TipRanks, ZIM Integrated Shipping Services stock has received five Holds and one Sell recommendation for a Hold consensus rating. ZIM’s average price forecast of $31.12 implies 18.69% upside potential.
Concluding Thoughts
Year-to-date, ZIM stock has lost more than half of its market capitalization due to sluggish demand and lower pricing.
While the near-term results may not be very appealing, the long-term growth potential of the stock remains intact given the strong balance sheet and the zero debt levels.
Likewise, long-term investors may want to take a position in the stock, ahead of its Q3 earnings.
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