Global metals recycling and resource recovery company Sims slipped (-5.7%) on Wednesday just 24-hours after we covered the stock here, liking the risk/reward in the $26-27 area, where it closed yesterday.
Last month SGM upgraded FY26 underlying EBIT guidance by around 14%, driven by stronger-than-expected trading in its North American metals business as higher US steel demand lifted ferrous scrap prices and non-ferrous markets remained robust. While guidance for Sims Lifecycle Services was modestly trimmed, we believe the medium-term outlook remains positive, with strengthening tailwinds across ferrous scrap, copper, aluminium and memory chip recycling supporting confidence in further earnings growth.
However, as is so often the case after surging higher, in this case ~50% in 2026, good news isn’t always enough for an expectant market.
- We like SGM as it falls towards $25, but after recently buying South32 (S32) we’re unlikely to increase our materials exposure further.
MM is bullish towards SGM around $26
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