ZIM - ZIM Integrated: Buy The Panic
2024-06-07 08:07:43 ET
Summary
- ZIM Integrated Shipping Services experienced a significant 19% decline in its stock price after being downgraded by a major investment bank.
- The downgrade was based on concerns about the company's exposure to spot freight rates and its lower-than-industry-standard volume on contract.
- Despite the downgrade, I believe the dip was an overreaction and I expect further expansion of the stock in the medium term.
- ZIM's FY2025 performance may exceed expectations, causing a potential expansion of the EV/EBITDA multiple, resulting in a 30-35% undervaluation from the current price. Buy the panic.
Introduction
You're now reading my 19th article about ZIM Integrated Shipping Services Ltd. ( ZIM ). Since July 2021, I have consistently been bullish about the company's long-term growth prospects. However, given the cyclical nature of this industry, the last 2 years have been a challenging period for ZIM (particularly with the significant decline from its peak in 2022). Despite this, I kept holding and averaging down on major dips regularly. My 18th article (the previous one), where I upgraded my rating to "Buy" for the medium and short term, proved to be quite successful: Since then, the stock has risen by more than 50%, outperforming the market by a factor of five....
ZIM Integrated: Buy The Panic