Free Trial

Oil’s Rally Could Boost These 3 Shipping Stocks

Nakhodka, Russia- 05.08.2015:Bunkering tanker Zaliv America container ship MSC Bruxelles. Nakhodka Bay. East (Japan) Sea. 05.08.2015 — Stock Editorial Photography

Key Points

  • As oil prices look to rally in the coming months, three shipping stocks could also break out.
  • Wall Street analysts see double—and even triple-digit upside in these names, knowing what lies ahead.
  • Even institutional buyers have come to take advantage of the situation for themselves.
  • 5 stocks we like better than Tidewater.

Plenty of vertical industries will see increases in volatility when and if oil prices begin to move away from the cyclical lows they currently trade at. While some investors might see volatility as potentially dangerous, those who have been in the stock market long enough understand that volatility allows money to be made as long as the original idea behind a trade is sound enough.

Today, there are plenty of tailwinds behind oil and the rest of the energy sector. These tailwinds could send oil prices back to levels not seen since 2022. One of the main factors for a bullish oil case is that the United States Federal Reserve (the Fed) has started to cut interest rates along with other major central banks worldwide.

As a result, lower rates and cheaper money will likely boost the business cycle higher, and that’s always a proxy for more oil demand. Now, if this thesis is correct, and more countries start to demand more oil, transportation stocks (shipping in particular) will be called upon to deliver the needed commodity. This is where names like Star Bulk Carriers Corp. NASDAQ: SBLK, ZIM Integrated Ltd. NYSE: ZIM, and even Tidewater Inc. NYSE: TDW come into play.

Why Analysts See Double-Digit Upside Potential for Star Bulk Carriers Stock

While not a direct crude oil transport name, Star Bulk Carriers does have exposure to the sort of commodities and basic materials that come in high demand when higher oil prices come alongside higher oil prices. So, in one way or another, success in the energy sector will likely be tied to the success of Star Bulk Carrier stock’s earnings.

Star Bulk Carriers Stock Forecast Today

12-Month Stock Price Forecast:
$23.80
60.81% Upside
Moderate Buy
Based on 4 Analyst Ratings
High Forecast$28.00
Average Forecast$23.80
Low Forecast$20.20
Star Bulk Carriers Stock Forecast Details

Knowing this, investors shouldn’t be surprised to see Wall Street analysts place a higher valuation on the stock today. Particularly, those at Jefferies Financial Group reiterated their Buy rating on this company, this time with a price target leading the consensus at a high of $28 a share.

To prove these new views right, Star Bulk Carriers stock would need to rally by as much as 47.3% from where it trades today, not to mention make a new high for the past 12 months in the company. Knowing that the fundamental tailwinds are starting to take on momentum right now, other market participants have shown their recognition of this upside.

Bearish traders have started to retreat from their short positions, as investors can judge by the nearly 1% short interest decline over the past month alone. This shows signs of bearish capitulation in front of all this potential upside. More than this, shareholders are offered a $2.8 a share payout.

On an annualized basis, this translates into a 14.8% dividend yield, which will beat any inflation pressures that might come from this renewed business cycle.

ZIM Integrated: A High-Risk, High-Reward Play with Earnings Upside at a Discount

ZIM’s shipping routes are highly exposed to Israel’s proximity and, by extension, to the several geopolitical conflicts and wild cards being driven in that region at the moment. This will place two major factors in the stock: one in favor of it and one against it.

ZIM Integrated Shipping Services Stock Forecast Today

12-Month Stock Price Forecast:
$15.14
-17.22% Downside
Reduce
Based on 7 Analyst Ratings
High Forecast$22.00
Average Forecast$15.14
Low Forecast$10.50
ZIM Integrated Shipping Services Stock Forecast Details

The factor against ZIM Integrated stock is the potential risks that might arise from the region, threatening the company’s fleet and routes, which would, in turn, threaten the earning power of the brand in the future if that were to happen.

The factor in favor has to do with pricing power, as more demand from these tighter routes could enable ZIM to command higher prices in exchange for taking the risk of these routes. All of this is reflected in the stock’s valuation metrics, which can offer investors an entry point.

Starting with the price-to-book ratios (P/B) ratio, where ZIM Integrated stock calls for a 1.3x multiple, investors can notice a significant discount to peers. The broader transportation sector’s average valuation of 2.2x today would mean investors can gain exposure to this higher pricing power for less.

Tidewater Stock: A Direct Energy Transport Play with Triple-Digit Upside Potential

This shipping stock directly impacts the transport of these energy commodities, including crude oil and natural gas. These two foundational energy materials for any economy that’s coming back online will make business activity for Tidewater stock rise along with it.

Tidewater Stock Forecast Today

12-Month Stock Price Forecast:
$95.80
95.51% Upside
Buy
Based on 6 Analyst Ratings
High Forecast$130.00
Average Forecast$95.80
Low Forecast$70.00
Tidewater Stock Forecast Details

Wall Street analysts know this since the consensus price target is now set at a high price of $102.25 a share, calling for a net upside of as much as 103% from where it trades today. More than that, some institutions have done their homework and realized this stock is a Buy today.

As recently as November 2024, those at State Street justified boosting their Tidewater stock holdings by 1.9%. After this new allocation, the bank’s net position has reached a high of $134 million today, or 3.6% ownership in the company. Like ZIM Integrated, Tidewater stock trades at a P/B ratio of 2.6x, which is also below the overall transportation sector’s average valuation today.

Should you invest $1,000 in Tidewater right now?

Before you consider Tidewater, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Tidewater wasn't on the list.

While Tidewater currently has a "Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

10 Best Stocks to Own in 2025 Cover

Click the link below and we'll send you MarketBeat's list of the 10 best stocks to own in 2025 and why they should be in your portfolio.

Get This Free Report
Gabriel Osorio-Mazilli
About The Author

Gabriel Osorio-Mazilli

Contributing Author

Value Stocks, Asian Markets, Macro Economics

Like this article? Share it with a colleague.

Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Star Bulk Carriers (SBLK)
3.5701 of 5 stars
$14.80+0.5%16.22%5.00Moderate Buy$23.80
ZIM Integrated Shipping Services (ZIM)
2.4889 of 5 stars
$18.29-0.5%6.34%1.53Reduce$15.14
Tidewater (TDW)
4.7826 of 5 stars
$49.00+0.7%2.04%14.41Buy$95.80
Compare These Stocks  Add These Stocks to My Watchlist 


Featured Articles and Offers

Recent Videos

From Landfills to Profits: Opal Fuels CEO Shares How the Company Turns Trash into Cash
The Real Reason Tesla Stock Is Soaring – and Why Tech Expert Says It Won’t Stop
Best ETFs for 2025: Growth, Stability, and AI-Driven Investing

Stock Lists

All Stock Lists

Investing Tools

Calendars and Tools

Search Headlines