SGM – Credit Suisse rates the stock as Neutral

The update at the AGM provided a materially improved trading outlook. Credit Suisse notes all metal divisions obtained solid earnings in the September quarter.

Intake volumes are indicated at 85% of FY19 levels, which is considered a “normal” trading year. Gains have been made as economies have emerged from lockdowns and this has driven steel production/scrap demand and more supportive non-ferrous pricing.

Credit Suisse retains a Neutral rating and asserts the update has endorsed previously uncertain projections rather than eliciting a material change in view. Target is raised to $10.75 from $9.85.

Sector: Materials.

Target price is $10.75.Current Price is $10.24. Difference: $0.51 – (brackets indicate current price is over target). If SGM meets the Credit Suisse target it will return approximately 5% (excluding dividends, fees and charges – negative figures indicate an expected loss).

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