SGM – Morgan Stanley rates the stock as Equal-weight

Sims is capitalising on improved scrap prices, although Morgan Stanley finds it unclear just how much of the trading upgrade is driven by inventory. The company has guided to a substantial upgrade in EBIT, to $360-380m.

Strength is coming from intake volumes, and improving gross margins owing to higher scrap prices and inventory management.

Morgan Stanley raises FY21 EBIT forecasts by around 20% and lifts the target to $19.50 from $18.00. Equal-weight retained. The industry view is In-Line.

Sector: Materials.

 

Target price is $19.50.Current Price is $17.05. Difference: $2.45 – (brackets indicate current price is over target). If SGM meets the Morgan Stanley target it will return approximately 13% (excluding dividends, fees and charges – negative figures indicate an expected loss).

 

 

About Broker News

FNArena's Australian Broker Call, is your daily news report on the latest recommendation, valuation, forecast and opinions recently published by Stockbrokers.

View more articles by Broker News →