AMKBY - ZIM Integrated Shipping Is Discounted For A Reason
2024-04-27 10:00:00 ET
Summary
- ZIM's prospects remain uncertain in FY2024, with the management's underwhelming guidance pointing to an uncertain dividend payout in the near-term.
- Despite the initial excitement surrounding the Red Sea crisis, the Drewry's World Container Index has declined from $3.96K in January 2024 to $2.71K in April 2024.
- Then again, the longer transit through the Cape of Good Hope is expected to absorb part of the capacity over supply, temporarily being a "blessing in disguise."
- AMKBF also expects the longer transit to last through Q3'24 - potentially triggering further tailwinds for the shipping industry.
- Even so, with uncertain dividend investment thesis, it may not be wise to chase ZIM here, with 2025/ 2026 likely to bring forth improved prospects as the macroeconomic outlook normalizes.
We previously covered ZIM Integrated Shipping (NYSE: ZIM ) in February 2024, discussing its near-term tailwinds, with the sudden spike in the Drewry’s World Container Index on a YTD basis likely to boost its top/ bottom lines in FQ1'24....
ZIM Integrated Shipping Is Discounted For A Reason