ZIM, the Industrials sector company, was revisited by a Wall Street analyst yesterday. Analyst Muneeba Kayani from Bank of America Securities reiterated a Sell rating on the stock and has a $13.20 price target.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Muneeba Kayani has given his Sell rating due to a combination of factors impacting ZIM’s financial outlook. Despite an optimistic third-quarter forecast, the company anticipates a significant drop in freight rates for the fiscal year 2025, coupled with a revised volume growth outlook that is now expected to remain flat year-over-year. This adjustment comes after a 6% decline in second-quarter volumes, with a notable 16% decrease in the Transpacific region.
Furthermore, while ZIM has raised its EBITDA guidance for 2025, the overall market conditions, including a negative outlook for rates in the second half of the year, have led to a lower price objective of $13.20. The company’s net debt to EBITDA ratio is also expected to increase, placing it at a disadvantage compared to its peers who maintain a net cash position. These factors collectively contribute to the reiterated Underperform rating, indicating a potential downside risk for investors.
In another report released on August 22, J.P. Morgan also maintained a Sell rating on the stock with a $9.80 price target.
ZIM’s price has also changed moderately for the past six months – from $21.800 to $14.470, which is a -33.62% drop .