ZIM Integrated Shipping stock: Golden cross points to a 44% jump
ZIM Integrated (NYSE: ZIM) stock price has gone parabolic this week as investors focus on the rising global shipping rates and the potential for dividends. It has risen for six consecutive weeks, reaching its highest swing since May 2023. It has soared by over 175% from its lowest point in 2023, outperforming the S&P 500 and Nasdaq 100 indices.
Global shipping costs are rising
ZIM, one of the biggest shipping companies, is benefiting from the rising prices, which could see it turn a profit this year. The closely watched Drewry World Container Index (WCI) soared to $3,159 last week.
While that price is lower than the year-to-date high of almost $4,000, it is significantly higher than last December’s low of $1,100. ZIM benefits from strong shipping rates since they help it to improve its gross and profit margins.
Shipping costs have jumped because of the ongoing geopolitical crisis in the Middle East that has forced companies to use the Cape of Good Hope. As a result, they are charging their customers more money because of the higher fuel and labor costs.
There are also signs that global trade is recovering. Data released on Thursday showed that China’s exports jumped by 1.5% in April after tumbling by 7.5% in the previous month. Imports also rebounded by 8.4% after falling by 1.9%. As a result, the country’s trade surplus widened to $72.5 billion.
Other countries like France, Germany, and the United States are seeing more trade numbers. According to the World Trade Organisation (WTO), the volume of trade will rise by 2.6% this year and 3.3% in 2024.
That trend will benefit shipping firms like ZIM. However, it will also be offset by an increase in shipping by leading companies like Maersk and Evergreen. ZIM estimates that there will be 120 new builds this year, with it receiving 46 containerships.
Analysts believe that ZIM Integrated will turn a profit if shipping costs remain this high. In its recent results, the company estimated that it will make an adjusted EBITDA of between $850 million and $1.4 billion. Its adjusted EBIT will be between minus $300 million and positive $300 million.
ZIM stock price golden cross
Technically, ZIM Integrated stock has crossed the crucial resistance point at $15.57, its highest swing on February 1st. Crossing that level was important since it was the double-top point. It has also jumped above the 23.6% retracement point.
Most importantly, the stock has formed a golden cross pattern, which forms when the 50-day and 200-day moving averages cross each other. In most cases, this pattern is usually followed by a strong rebound.
Therefore, the outlook for the stock is extremely bullish means that it will jump to the 50% retracement point at $25.1, which is about 44% higher than the current level.
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