Industry Analysts Just Upgraded Their ZIM Integrated Shipping Services Ltd. (NYSE:ZIM) Revenue Forecasts By 11%

ZIM Integrated Shipping Services Ltd. (NYSE:ZIM) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects. The market seems to be pricing in some improvement in the business too, with the stock up 4.7% over the past week, closing at US$61.30. Whether the upgrade is enough to drive the stock price higher is yet to be seen, however.

Following the upgrade, the latest consensus from ZIM Integrated Shipping Services' seven analysts is for revenues of US$13b in 2022, which would reflect a sizeable 23% improvement in sales compared to the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of US$12b in 2022. It looks like there's been a clear increase in optimism around ZIM Integrated Shipping Services, given the nice increase in revenue forecasts.

See our latest analysis for ZIM Integrated Shipping Services

There was no particular change to the consensus price target of US$81.35, with ZIM Integrated Shipping Services' latest outlook seemingly not enough to result in a change of valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic ZIM Integrated Shipping Services analyst has a price target of US$120 per share, while the most pessimistic values it at US$41.80. 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the ZIM Integrated Shipping Services' past performance and to peers in the same 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. It seems obvious that as part of the brighter growth outlook, ZIM Integrated Shipping Services is expected to grow faster than the wider industry.

The Bottom Line

The highlight for us was that analysts increased their revenue forecasts for ZIM Integrated Shipping Services this year. Analysts also expect revenues to perform better than 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. You can learn more, and discover the 3 other flags we've identified, for free on our platform here.

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.

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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.