ZIM Stock Sinks Over 13% After Jefferies Downgrade, End Of Dockworkers’ Strike: Retail Holds Bearish Course

Shares of ZIM Integrated Shipping Services (ZIM) fell over 13% on Friday after Jefferies downgraded the stock to ‘Hold’ from ‘Buy,’ while keeping a price target of $25.

Jefferies reportedly noted that the stock has been "a top performer," but the shares are hovering close to the brokerage’s $25 target after having risen 40% over the past month.

Indeed, ZIM has recorded gains of over 93% on a year-to-date basis. Jefferies believes that although there is risk of further freight disruption, the stock appears to reflect much of this potential. The brokerage has also reportedly removed ZIM from its "Franchise Picks" list.

At the same time, U.S. dockworkers along the East Coast and the Gulf of Mexico agreeing to end their strike has also added to the pressure on stock as higher freight rates are unlikely to sustain going forward.

According to The Wall Street Journal, the deadlock ended after port employers offered a 62% raise in wages over six years.

The report also noted that the agreement between the two parties came after the White House pressured large shipping lines and cargo terminal operators to make a new offer to the union.

Following the developments, retail sentiment on Stocktwits fell into the ‘bearish’ territory (8/100).

Stocktwits users with a bearish outlook are maintaining a cautious stance. One user, for instance, expects freight rates to decline to 2023 levels.

Some users are also considering buying on dips near the $16 mark.

ZIM’s most recent earnings reflected some decent figures. Operating income (EBIT) for the second quarter came in at $468 million, compared to operating loss of $168 million in the same period a year ago. Net income came in at $373 million compared to a net loss of $213 million in the second quarter of 2023.

Notably, the stock has been finding support on a trend line since April, which is likely to get breached if Friday’s premarket decline sustains throughout the day.

Also See: Spirit Airlines Stock Plunges Pre-Market After WSJ Report Says Firm Exploring Bankruptcy Filing: Retail’s Frustrated

For updates and corrections email newsroom@stocktwits.com

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