The company has withdrawn guidance because of the unknown impact on scrap demand and activity. Credit Suisse notes the positives include a strong balance sheet, with limited draw on working capital under the current trading conditions.
The broker expects the share price will remain under pressure until there is evidence of improvement in the main business drivers.
The retreat in the share price offers value and the broker upgrades to Outperform from Neutral. A new analyst assumes coverage. Target is reduced to $9.10 from $10.60.
Sector: Materials.
Target price is $9.10.Current Price is $6.40. Difference: $2.70 – (brackets indicate current price is over target). If SGM meets the Credit Suisse target it will return approximately 30% (excluding dividends, fees and charges – negative figures indicate an expected loss).
