ZIM, the Industrials sector company, was revisited by a Wall Street analyst today. Analyst Muneeba Kayani from Bank of America Securities maintained a Sell rating on the stock and has a $12.20 price target.
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Muneeba Kayani has given her Sell rating due to a combination of factors impacting ZIM’s financial outlook. One of the primary reasons is the expected EBIT loss in the fourth quarter, despite a modest sequential increase in freight rates and a forecasted EBITDA of $580 million for the third quarter. Additionally, while the 2025 adjusted EBITDA is projected to be in line with consensus, the potential for increased guidance does not offset the anticipated challenges.
Another significant concern is the newly announced port fees by China, which could significantly impact ZIM due to its substantial US ownership. This could result in approximately $600 million in fees if the company exceeds the 25% US ownership threshold, a cost not currently factored into estimates. Furthermore, while a dividend is expected in the third quarter of 2025, the estimated payout and yield remain at the lower end of company policy, indicating limited upside for investors. These factors contribute to the decision to maintain an Underperform rating with a price objective of $12.20.
In another report released on September 30, J.P. Morgan also maintained a Sell rating on the stock with a $10.00 price target.