Sims Limited: Riding the data center recycling super-cycle; Raising PO to A$31.65/sh

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Sims Limited: Riding the data center recycling super-cycle; Raising PO to A$31.65/sh

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Sims Limited

Riding the data center recycling super-

cycle; Raising PO to A$31.65/sh

Reiterate Rating: BUY | PO: 31.65 AUD | Price: 28.01 AUD

Reit Buy: EPS momentum, earnings revision & rerating 11 June 2026

SGM’s share price is up 54% YTD, driven by earnings upgrades (Exhibit 1). Consensus Equity

has been upgrading FY26-FY28 EPS by 52-64% since Jan-2026 primarily driven by the

rise of SLS from a non-core segment (~12% EBIT on a 5Y average) to a core earnings

Key Changesdriver (~46% of FY26e BofAe EBIT), see Exhibit 14. We expect earnings growth from

SLS to continue and lift our FY26–FY27 EBITDA forecasts by 5.3% (avg). Rolling forward (A$) Previous Current

our valuation base to CY26 & CY27 (avg), we maintain our methodology (6.5x metals, Price Obj. 24.75 31.65

10.0x SLS) and raise our PO to A$31.65 (from A$24.75). Reiterate Buy: EPS momentum 2026E EPS 1.10 1.21

remains strong, and we see further upside to consensus and further rerating potential. 2027E EPS 1.87 2.05

2028E EPS 2.60 2.62

2026E EBITDA (m) 617.5 649.7We expect positive earnings revisions to continue

Consensus FY26–FY28 EBIT has lifted 44–54% since Jan-26, primarily driven by SLS 2027E EBITDA (m) 816.4 860.0

revisions of 94–126%. See Exhibit 13. Our FY26–FY28 EBIT sits 8–54% above 2028E EBITDA (m) 1,000.6 994.4

consensus. On a triple momentum basis (earnings price, news), SGM screens in the top 5

ASX200 stocks in our quant analysis. See: Triple Momentum. Chen Jiang >>

Research Analyst

Merrill Lynch (Australia)Rerating to peers to continue as earnings mix shifts +61 2 9226 5771

IRM US (not covered) is the closest listed peer to compare with SGM’s SLS business. chen_jiang@bofa.com