It was smooth sailing for ocean transportation specialist Zim Integrated Shipping Services(NYSE: ZIM) stock over the past five trading days. An analyst's substantial price target increase helped boost investor sentiment on the company, even if that pundit remained generally bearish on its prospects. At the close of the trading week, according to data compiled by S&P Global Market Intelligence, Zim's stock price had risen by almost 12%.
A hefty price target hike... but no recommendation change
The raise came from Bank of America Securities' Muneeba Kayani. On Tuesday, the London-based analyst pushed her Zim price target into double-digit territory at $12.20, well up from her former level of $9.20. Despite that, she maintained her underperform (sell, in other words) recommendation on the shipping company.
The persistent unrest in the Middle East has affected the operations and performance of ocean shippers. Kayani pointed out that this hasn't necessarily been detrimental to Zim, however.
In her view, the disruption in the troubled region has resulted in higher rates for freight shipping, which is directly affecting the company's fundamentals.
Calmer seas ahead for Zim?
Because of this, the prognosticator has lifted her estimates for Zim's second quarter and second half of 2024. As for the full year, Kayani went as far as to raise her forecast for the company's non-GAAP (adjusted) earnings before interest, taxes, depreciation, and amortization (EBITDA) by 44% to $2.2 billion. Although this is broadly in line with the general analyst consensus, it well exceeds management's guidance of $1.15 billion to $1.55 billion.
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Bank of America is an advertising partner of The Ascent, a Motley Fool company. Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bank of America. The Motley Fool recommends Zim Integrated Shipping Services. The Motley Fool has a disclosure policy.
