Strength Seen in ZIM (ZIM): Can Its 6.1% Jump Turn into More Strength?

ZIM Integrated Shipping Services (ZIM) shares soared 6.1% in the last trading session to close at $26.82. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 1.9% gain over the past four weeks.

The uptick is owing to the bullishness surrounding the shipping industry. Freight rates are high driven by the ongoing supply chain pressures, vessel rerouting, and tensions in the Strait of Hormuz. This development is also supporting the likes of ZIM. 

This container shipping company is expected to post quarterly loss of $0.10 per share in its upcoming report, which represents a year-over-year change of -152.6%. Revenues are expected to be $1.63 billion, down 0.6% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For ZIM, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on ZIM going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

ZIM is a member of the Zacks Transportation - Shipping industry. One other stock in the same industry, Knot Offshore (KNOP), finished the last trading session 1.1% higher at $10.6. KNOP has returned -2% over the past month.

For Knot Offshore, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at -$0.03. This represents a change of -115% from what the company reported a year ago. Knot Offshore currently has a Zacks Rank of #3 (Hold).

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This article originally published on Zacks Investment Research (zacks.com).

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