With increased international trade and rising e-commerce demand driving the movement of goods across continents, the shipping industry is playing a pivotal role in the global economy.
Companies in this sector benefit from robust trade flows and the continuous need for efficient logistics, making them vital to global supply chains. Therefore, shipping stocks like Hafnia Limited (HAFN), ZIM Integrated Shipping Services Ltd. (ZIM), and Matson, Inc. (MATX) are tapping into the benefits of global trade.
The surge in global trade has led to higher shipping volumes, boosting shipping companies' revenue streams. According to the U.S. Census Bureau and the U.S. Bureau of Economic Analysis, in December 2024, imports were $364.9 billion, $12.4 billion more than November imports. With economies worldwide experiencing steady growth and increased demand for imported goods, the shipping sector is witnessing a resurgence in activity.
Another reason for the shipping industry’s transformation is technological advancements. As the industry continues to evolve, embracing technological advancements is becoming more essential, as they enhance efficiency and reduce costs. Digital platforms, automation, and advanced tracking systems are optimizing route planning and cargo handling. These innovations not only streamline operations but also improve transparency across supply chains.
Further, the global cargo shipping market is anticipated to reach $4.2 trillion by 2031, exhibiting a CAGR of 7%. This shift is driven by increased trade, port construction, and e-commerce.
Considering the positive trajectory of developments, let’s delve deeper into Shipping stocks, starting with number 3:
Stock #3: Hafnia Limited (HAFN)
Headquartered in Hamilton, Bermuda, HAFN owns and operates oil product tankers. It also transports oil, oil products, and chemicals for major national and international oil companies, chemical companies, and trading and utility companies. The company operates through five segments: Long Range II; Long Range I; Medium Range (MR); Handy size; and Specialized.
In terms of forward non-GAAP P/E, HAFN is trading at 3.36x, 71.1% lower than the industry average of 11.63x. Likewise, the stock’s forward EV/EBITDA and Price/Cash Flow multiples of 3.25 and 2.65 are 44.2% and 48.5% lower than their respective industry averages of 5.83 and 5.14.
In the fiscal third quarter that ended on September 30, 2024, HAFN’s revenues (Hafnia Vessels and TC Vessels) increased 12.5% year-over-year, amounting to $497.89 million. The company reported operating profit of $219.01 million, indicating a 31% growth from the prior-year quarter.
Its profit for the financial period came in at $215.63 million, up 46.8% year-over-year, while its adjusted earnings per share grew by 44.8% from the prior-year quarter to $0.42. Also, HAFN’s adjusted EBITDA rose 16.4% from the year-ago value of $257.01 million.
Analysts expect HAFN’s revenue for the fiscal year (ended December 2024) to increase 2.5% year-over-year to $1.45 billion, while its EPS for the same quarter is expected to remain flat from the prior year to $1.46.
Shares of HAFN have declined by marginally intraday to close the last trading session at $4.90.
HAFN’s POWR Ratings reflect this robust outlook. The stock has an overall rating of B, which equates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
HAFN has a B grade for Value and Quality. It is ranked #12 out of 34 stocks in the B-rated Shipping industry. Click here to see the additional ratings for HAFN (Growth, Momentum, Stability, and Sentiment).
Stock #2: ZIM Integrated Shipping Services Ltd. (ZIM)
Based in Haifa, Israel, ZIM provides container shipping and related services internationally. It operates as a fleet and a network of shipping lines offering cargo transportation services on all major global trade routes; it also offers multi-modal, cargo handling, tariff management, schedule information, and other related services.
On November 8, ZIM announced that it is accelerating the global deployment of smart containers with Hoopo’s innovative hoopoSense Solar trackers. This global rollout of Hoopo’s technology is an all-in-one device that streamlines deployment and increases carriers' accurate tracking visibility and transparency through its integration.
In terms of forward non-GAAP P/E, ZIM is trading at 1.32x, 93.1% lower than the industry average of 19.27x. Likewise, the stock’s forward EV/Sales and Price/Cash Flow multiples of 0.76 and 0.78 are 60.3% and 94.8% lower than the industry averages of 1.91x and 15.12x, respectively.
For the third quarter that ended September 30, 2024, ZIM’s income from voyages and related services increased 117.2% year-over-year to $2.77 billion. Its gross profit came in at $1.31 billion compared to the year-ago net loss of $2.18 billion. Its adjusted EBITDA rose 625.6% from the prior year’s quarter to $1.53 billion.
The company’s profit for the period stood at $1.12 billion compared to the prior-year quarter’s loss of $2.27 million, while its EPS came in at $9.34 versus a loss of $18.90 per share last year. Additionally, ZIM’s free cash flow rose 343.3% from the year-ago value to $1.45 billion.
Street expects ZIM’s revenue for the fiscal fourth quarter (ended December 2024) to increase 67.7% year-over-year to $2.02 billion. Its EPS for the same period is expected to remain flat from the prior year, settling at $3.49.
ZIM’s shares have surged 79.7% over the past year and 31.2% over the past month to close the last trading session at $22.14.
ZIM’s bright prospects are reflected in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.
It also has an A grade for Value and Quality and a B for Growth. Within the same Shipping industry, it is ranked #6. Click here to see ZIM’s ratings for Momentum, Stability, and Sentiment.
Stock #1: Matson, Inc. (MATX)
MATX is engaged in the provision of ocean transportation and logistics services. The company operates through two segments: Ocean Transportation and Logistics.
In terms of forward EV/Sales, MATX is trading at 1.46x, which is 23.6% lower than the industry average of 1.91x. The stock’s forward Price/Cash Flow ratio of 8.01x is 46.9% below the industry average of 15.12x. Also, its forward EV/EBITDA multiple of 8.42 compares to the industry average of 11.38x.
During the fiscal fourth quarter that ended on December 31, 2024, MATX’s total operating revenue increased 12.9% year-over-year, amounting to $890.3 million. Its operating profit amounted to $147.5 million, increasing 95.9% year-over-year. In addition, the company’s net income amounted to $128 million and grew 105.1% from the year-ago value, while its EPS stood at $0.79, up 113.5% year-over-year. Also, its EBITDA came in at $195.2 million, representing an increase of 63.5% from the last year.
The consensus revenue estimate of $782.44 million for the fiscal first quarter (ending March 2025) represents an 8.4% increase year-over-year. The consensus EPS estimate of $1.64 for the about-to-be-reported quarter indicates a 57.2% improvement year-over-year. The company has an excellent earnings surprise history; it surpassed the consensus EPS estimates in each of the trailing four quarters.
Over the past year, the stock has surged 21.5%, closing the last trading session at $141.37.
It’s no surprise that MATX has an overall rating of B, equating to a Buy in our POWR Ratings system. It has a B grade for Growth and Quality. Out of 34 stocks in the same B-rated industry, MATX is ranked #4.
Beyond what is stated above, we’ve also rated MATX for Value, Momentum, Stability, and Sentiment. Get all MATX’s ratings here.
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MATX shares were trading at $145.59 per share on Wednesday afternoon, up $4.22 (+2.99%). Year-to-date, MATX has gained 8.24%, versus a 1.31% rise in the benchmark S&P 500 index during the same period.
About the Author: ShreyaRathi
