Citi sees earnings downside for Australia's Sims on subdued outlook; cuts PT

Sims

11/09/2023 22:23

** Citi expects Australian metals and electronics recycling
firm Sims Ltd  SGM.AX  to face significant earnings hit in
fiscal 2024 as the brokerage foresees persistent challenges in
market conditions through the year 
    ** Citi cuts SGM's price target to A$14.30 from A$15
    ** However, Citi raised rating for the stock to 'neutral'
from 'sell' citing improvements in scrap pricing and volume for
FY25
    ** Brokerage slashes Sims' FY24 net profit after tax (NPAT)
estimate by 44.1% to A$124.9 million ($80.31 million)
    ** Citi believes SGM should benefit in the longer term from
certain steel-making trends given decarbonisation requirements
    ** Two of 13 analysts rate the stock "buy" or higher, six
"hold" and five "sell" or lower; their median PT is A$15.70 –
LSEG data
    ** SGM up 5.35% YTD, as of last close, vs a 2.2% increase in
the benchmark S&P/ASX 200 index  .AXJO  

($1 = 1.5552 Australian dollars)

 (Reporting by Adwitiya Srivastava in Bengaluru; Editing by Lisa
Shumaker)
 ((Adwitiya.Srivastava@thomsonreuters.com;))