ZIM Integrated Shipping Services (ZIM) PT Raised to $35 at Jefferies Anticipating A Double Digit Yield
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Jefferies analyst Randy Giveans raised the price target on ZIM Integrated Shipping Services (NYSE: ZIM) to $35.00 (from $30.00) after the company announced an adj. EPS of $3.66, which beat expectations primarily due to higher than expected revenues. Adj. EBITDA for the quarter was $531.3 MM, 360% higher y/y as the Company announced 12-year chartering agreements for 10 x 15,000 TEU vessels, gave strong annual 2021 EBITDA guidance of $1.4-1.6 Bn, and guided to a dividend of 30-50% of annual net income to be paid in 1Q22.
While the financials were strong, the company also announced the intent for an annual dividend. The analyst reiterated the Buy rating, handicapping the yield and stated "The Company announced its intention to declare an annual dividend for 2021 FY results guiding to a pay out of 30-50% of annual 2021 net income, with the first dividend payment in 1Q22. Management said it prefers an annual dividend over quarterly dividends in order to better control for quarterly volatility and seasonality. Based on our estimated 2021 net income, we believe the dividend could range between $260 MM and $435 MM, or $2.25 to $3.75 per share, resulting in a current yield of 9-15%."
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