Citi upgrades Australia's Sims to 'buy'; sees recoveries for co in long run

Sims

13/03/2024 18:58

** Analysts at Citi upgrade rating for ASX-listed shares of
Sims Ltd  SGM.AX  to "buy"
    ** "Ex-China steel production expected to lift this year &
Turkish scrap volumes are up 20% on PCP" - Citi
    ** Brokerage sees FY26 margins back to 4% for EBITDA of
A$567 mln ($375.86 mln)
    ** Expects SGM as a beneficiary of steel decarbonisation
trends in long term
    ** However, analysts see SGM's H2 FY24 to be tough due to
falling ferrous scrap prices and sees earnings risks to FY24
forecasts
    ** One of 13 analysts rate the stock "buy" or higher, seven
"hold" and five "sell" or lower; their median PT is A$13.50 –
LSEG data
    ** Stock down ~24% YTD, as of last close

($1 = 1.5085 Australian dollars)

 (Reporting by Roshan Thomas in Bengaluru)
 ((Roshan.Thomas@thomsonreuters.com))