Morningstar trims Sims' 2026 earnings estimate as US scrap prices fall

Sims

01/12/2025 18:38

** Morningstar lowers fiscal 2026 earnings estimate for Australia's Sims SGM.AX; maintains fair value estimate of A$15.80 per share

** Investment research firm trims FY26 underlying EBIT for the scrap recycler by 33% on weaker U.S. ferrous scrap prices and margins

** Low demand is suppressing prices for ferrous scrap metal, despite tariffs intended to protect the steel industry - Morningstar

** "More than six months after tariffs began, scrap steel prices are about 6% lower than the March 2025 peak, where we expected them to rise"

** Analyst sees tariff tailwinds and likely interest rate cuts supporting scrap prices from FY26–FY28

** Two of 12 analysts rate the stock "buy" or higher, six "hold" and four "sell" or lower; their median PT is A$15.83, according to data compiled by LSEG

** Stock up 43.7% this year, as of last close

 (Reporting by Roshan Thomas in Bengaluru)

 ((Roshan.Thomas@thomsonreuters.com;))