2024-02-09 11:58:35 ET
Summary
- ZIM Integrated Shipping Services has the potential to generate $24 in earnings per share annually and is currently trading at a substantial discount.
- The company has a robust financial position with over $23 in cash per share and additional assets valued at $5.3 per share.
- ZIM's strategic investments and actively managed fleet capacity model position it for profitability and a highly competitive cost structure by 2025.
Investment Thesis
ZIM Integrated Shipping Services Ltd. has re-emerged as a formidable cash machine, with the potential to generate $24 in earnings per share ((EPS)) annually at current shipping rates. While that EPS level would reflect an extremely optimistic scenario, my more realistic assumption is $11.45 EPS for 2024. What's more, the company boasts over $23 in cash per share and holds additional assets valued at $5.3 per share, including vessels and containers, while currently trading at approximately $13. With these robust figures, the minimum fair value I estimate for ZIM is $30, reflecting an impressive upside of more than 100%, with potential for further adjustments based on rate fluctuations.
Business Overview
ZIM Integrated Shipping Services Ltd. stands as a prominent Israeli global container liner shipping company that has recently diversified its portfolio by venturing into the car carrier segment. At the forefront of ZIM's distinctive approach are the pillars of an actively managed fleet capacity model, remarkable agility, and a commitment to technological innovation achieved through robust big data capabilities and strategic technological partnerships....
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ZIM Integrated Shipping: Red Sea Disruption Is Here To Stay, Over 100% Upside Potential