Recent IPO Surges As Shipping Boom Fuels Strong Earnings, Guidance

Recent IPO ZIM Integrated Shipping Services (ZIM) crushed earnings views on rising container volumes and guided significantly higher. ZIM stock surged.


The Israeli shipping liner’s earnings per share shot up to $7.38 from 23 cents in the year-ago quarter. Revenue vaulted 199% to $2.38 billion, driven by an increase in revenue from containerized cargo. Analysts were expecting EPS of $5.71 and sales of $1.91 billion, according to Zacks Investment Research.

Both freight rates and carried volumes rose. ZIM carried 921,000 twenty-foot equivalent units (TEUs) in Q2, up 44% year on year. The average freight rate per TEU was $2,341 in Q2, up 118%.

For fiscal 2021, ZIM now expects to generate adjusted EBITDA of $4.8 billion-$5.2 billion and adjusted EBIT of $4 billion-$4.4 billion. That is up from May’s guidance for adjusted EBITDA of $2.5 billion-$2.8 billion and adjusted EBIT of $1.85 billion-$2.15 billion.

The Haifa-based company expects a stronger second half of the year than the first six months. It also predicted strong dividend payouts.

ZIM Stock

Shares popped 6% to 48.27 in early stock market trading. ZIM stock eyes a 49.90 buy point from a cup base, according to MarketSmith chart analysis. The relative strength line is rising but below June highs.

Among other shipping stocks, Danaos (DAC), a recent IBD Stock of the Day, rallied 1.9%, Star Bulk Carriers (SBLK) gained 2.7%, and Textainer Group (TGH) edged up 0.4%.

ZIM stock went public in Janaruy amid a container shipping boom. Shipping rates surged amid strong demand for electronics, furniture, bicycles and other goods as consumers rode out the pandemic close to home.

Delays due to overburdened ports and Covid-related disruptions have further stretched industry capacity.


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