Morgan Stanley picks Australia's BlueScope over Sims ahead of H2 FY25 results

Sims

07/08/2025 01:21

** BlueScope Steel BSL.AX, Sims SGM.AX down ~0.2% each

** Morgan Stanley reiterates preference for BSL over SGM ahead of H2 FY25 earnings, citing stronger North American steel spreads, healthier demand drivers

** Forecasts H2 FY25 EBIT of A$484 mln ($314.5 mln) for BSL, above consensus and company guidance, underpinned by stronger-than-expected North American pricing

** Expects North America strength to offset volume headwinds in Australian steel products business and New Zealand challenges; stays bullish on BSL into FY26

** For SGM, MS sits 3% below H2 FY25 EBIT consensus, and more than 15% below FY26 onwards, citing risks to trading margins, limited volume growth without M&A

** Says elevated Chinese exports, stagnant Asian spreads weigh on sector

($1 = A$1.5392)

 (Reporting by Rishav Chatterjee in Bengaluru)

 ((Rishav.Chatterjee@thomsonreuters.com;))