ZIM - ZIM stock: golden cross hints that the ship has left the port
2024-06-04 09:08:56 ET
ZIM Integrated (NYSE: ZIM) stock price has done well this year, making it one of the top-performing companies in Wall Street. It has soared to over $22, its highest level since August 2022. It has jumped by over 240% from its lowest point in 2023, bringing its valuation to over $2.5 billion.
ZIM Integrated dividend ahead
ZIM Integrated Shipping company is doing well, helped by the rising freight rates. Its most recent financial results showed that its carried volume jumped from 846 K-TEUs, a big increase from the 769 it carried in 2023.
The average freight rate rose from $1,390 in Q1’23 to $1,452 while its revenue jumped from over $1.3 billion to $1.56 billion.
Most importantly, the company reported its first quarterly profit in a long time. Its net profit jumped to over $92 million from a loss of $65 million in the previous year. As a result, the firm decided to return $28 million to investors through a dividend , as I predicted before it published its financial results.
Additionally, the company upgraded its forward guidance. It expects that its adjusted EBITDA will be between $1.15 billion and $1.55 billion. It backed this guidance on the view that freight rates will continue rising.
Data by Drewry shows that the World Container Index rose by over 4% last week to $4,226 for a 40ft container. This is a strong growth considering that the index was less than $1,500 at the beginning of the year.
World Container Index chart
This view is also supported by the latest Maersk earnings. The world’s second-biggest company in the industry said that it will make a profit of between $1 billion and $3 billion. That is a big increase for a company that predicted it would make a loss of $2 billion this year.
A likely catalyst for the industry is that big shippers like Walmart and Target have started preparing for their holiday season earlier than expected. They are afraid of the ongoing supply chain disruptions as geopolitics continue.
ZIM Integrated stock price forecast
The daily chart reveals that the ZIM Integrated Shipping share price bottomed at $6.25 in December last year. It has now soared and moved above the crucial resistance level at $20. Along the way, it has jumped above the 38.2% Fibonacci Retracement level.
It has also formed a golden cross pattern as the 50-day and 200-day Exponential Moving Averages (EMA) formed a bullish crossover. Therefore, the stock’s outlook is bullish, with the next level to watch being at the 50% retracement point at $25.10.
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