Earnings help Zim sail to top industrial gainer of week, while outlook sinks Chart

The Industrial Select Sector (XLI) was in the red for the second week (-2.35%) in a row, for the week ending March 17. This week’s industrial gainers (in our segment) include some logistics services providers, while the decliners saw some airline names.

The SPDR S&P 500 Trust ETF (SPY) +1.06% gained, driven by Technology and Communication, amid the worst financial crisis since 2008. In the U.S., Signature Bank and Silicon Valley Bank were taken over by U.S. regulators over liquidity concerns, while Switzerland’s Credit Suisse received a $54B lifeline from its Swiss National Bank. Meanwhile, markets are expecting a 25-basis point rate hike by the Federal Reserve at its upcoming monetary policy meeting.

The top five gainers in the industrial sector (stocks with a market cap of over $2B) all gained more than +5% each this week. YTD, all these five are in the green.

ZIM Integrated Shipping Services (NYSE:ZIM) +22.53%. The Israeli shipping company, which was among the decliners two weeks ago, leapfrogged to take this week’s top spot on the back of its Q4 earnings show. On Monday, the company’s stock rose (+6.59%) on Q4 earnings beat and a positive outlook while also declaring a $6.40/share quarterly dividend. The following day the stock surged even more (March 14 +10.35%).

ZIM has a SA Quant Rating — which takes into account factors such as Momentum, Profitability, and Valuation among others — of Hold. The stock has a factor grade of A+ for Profitability but F for Growth. The average Wall Street Analysts’ Rating agrees with a Hold rating of its own, wherein 3 out of 7 analysts see the stock as such. YTD, +39.50%.

ZTO Express (Cayman) (ZTO) +10.53%. The Chinese logistics services provider landed among the gainers for the second week in a row. The stock climbed +7.94% on Thursday despite Q4 results missing estimates.

The SA Quant Rating on ZTO is Buy, with a score of A for Profitability B- for Momentum. The average Wall Street Analysts’ Rating is Strong Buy, wherein 16 out of 22 analysts tag the stock as such. YTD, +5.88%.

The chart below shows YTD price-return performance of the top five gainers and SP500:

FedEx (FDX) +9.50%. Logistics’ peer FedEx’s stock rose +7.97% on March 17 after its Q3 earnings show as cost-saving efforts boosted performance. The Memphis, Tenn.-based company also raised its FY2023 forecasts, prompting several analysts to upgrade the stock.

The SA Quant Rating on FDX is Hold, with a score of C for both Momentum and Valuation. The average Wall Street Analysts’ Rating differs with a Buy rating, wherein 12 out of 29 analysts view the stock as Strong Buy. YTD, +27.20%.

Rentokil Initial (RTO) +7.39%. U.K.-based pest control services provider Rentokil saw its shares soar the most this week on Thursday (+9.71%) after FY22 revenue grew about 25% Y/Y. The SA Quant Rating on RTO is Hold, which is in start contrast to the average Wall Street Analysts’ Rating of Buy. YTD, +7.01%.

Canadian Pacific Railway (CP) +5.69%. The Surface Transportation Board approved CP’s acquisition of Kansas City Southern on Wednesday, leading to a surge in stock. The average Wall Street Analysts’ Rating on CP is Buy, while the SA Quant Rating is Hold. YTD, +3.62%.

This week’s top five decliners among industrial stocks (market cap of over $2B) all lost more than -14% each. YTD, 3 out of these 5 stocks are in the red.

Chart Industries (NYSE:GTLS) -22.09%. The Ball Ground, Ga.-based cryogenic solutions provider slipped to its lowest this week on Friday (-12.38%) after providing updated FY 2023 outlook including the recently completed Howden acquisition, which apparently disappointed investors.

The SA Quant Rating on GTLS is Sell with a score of F for Profitability and D for Momentum. The rating is in stark contrast to the average Wall Street Analysts’ Rating of Strong Buy, wherein 12 out of 15 analysts see the stock as such. YTD, -10.67%.

Herc Holdings (HRI) -16.27%. Th Florida-based company — which rents earthmoving, trucks and other equipment — witnessed its shares sink the most this week on Monday (-9.35%). The SA Quant Rating on HRI is Hold, with a score of B- for Valuation and C for Momentum. The average Wall Street Analysts’ Rating is Buy, wherein 6 out of 10 analysts see the stock as Strong Buy. YTD, -19.59%.

The chart below shows YTD price-return performance of the worst five decliners and XLI:

United Airlines (UAL) -15.56%. Market turmoil appeared to weigh on the airline industry as the sector (JETS) declined sharply on Monday. UAL’s shares, which saw decline in the prior week too, tumbled for three days straight this week, starting Monday after providing a pessimistic outlook for the first quarter of 2023.

The SA Quant Rating on UAL is Strong Buy, with a score of A+ for Profitability and A for Growth. The average Wall Street Analysts’ Rating has a Buy rating, wherein 7 out of 21 analysts tag the stock as Strong Buy. YTD, +14.16%.

Terex (TEX) -14.88%. The shares fell -8.80% on Friday after Bank of America downgraded the heavy machinery maker’s stock to Neutral from Buy. The SA Quant Rating on TEX is Strong Buy, while the average Wall Street Analysts’ Rating is Buy. YTD, +6.06%, the only stock besides UAL which is in the green in this week’s worst five performers.

Alaska Air Group (ALK) -14.77%. Another airline stock, which had a similar fate like UAL, having declined in the prior week, and falling three days straight starting Monday. The Seattle-based company lowered its margin forecast for Q1 amid higher fuel costs. The SA Quant Rating on ALK is Buy, while the average Wall Street Analysts’ rating is Strong Buy. YTD, -8.50%.