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Analysts Are Betting On ZIM Integrated Shipping Services Ltd. (NYSE:ZIM) With A Big Upgrade This Week

Celebrations may be in order for ZIM Integrated Shipping Services Ltd. (NYSE:ZIM) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects. Investor sentiment seems to be improving too, with the share price up 4.7% to US$61.30 over the past 7 days. Whether the upgrade is enough to drive the stock price higher is yet to be seen, however.

Following the upgrade, the most recent consensus for ZIM Integrated Shipping Services from its seven analysts is for revenues of US$13b in 2022 which, if met, would be a huge 23% increase on its sales over the past 12 months. Prior to the latest estimates, the analysts were forecasting revenues of US$12b in 2022. The consensus has definitely become more optimistic, showing a decent improvement in revenue forecasts.

Check out our latest analysis for ZIM Integrated Shipping Services

earnings-and-revenue-growth
earnings-and-revenue-growth

We'd point out that there was no major changes to their price target of US$81.35, suggesting the latest estimates were not enough to shift their view on the value of the business. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on ZIM Integrated Shipping Services, with the most bullish analyst valuing it at US$120 and the most bearish at US$41.80 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that ZIM Integrated Shipping Services' rate of growth is expected to accelerate meaningfully, with the forecast 32% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 25% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to see a revenue decline of 5.3% annually. So it's clear with the acceleration in growth, ZIM Integrated Shipping Services is expected to grow meaningfully faster than the wider industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts lifted their revenue estimates for this year. They're also forecasting for revenues to perform better than companies in the wider market. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at ZIM Integrated Shipping Services.

Analysts are clearly in love with ZIM Integrated Shipping Services at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as dilutive stock issuance over the past year. For more information, you can click through to our platform to learn more about this and the 3 other concerns we've identified .

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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