U/G to Hold: More LT conviction in SLS

Research evidence excerpt

U/G to Hold: More LT conviction in SLS

Australia | Materials (Steel)

Sims Metal EquityJuneResearch17, 2026

RATING | TARGET | ESTIMATE CHANGEU/G to Hold: More LT conviction in SLS

SGM's FY26 guidance was ~15% ahead of consensus at the midpoint RATING HOLD (UNDERPERFORM)

driven by better NAM/SAR JV conditions, with SLS EBIT guidance inline PRICE AUD29.28^

with expectations. US trading margins and non-ferrous pricing drives FY26 PRICE TARGET | % TO PT AUD31.00 (AUD19.00) |

upgrades, however we also meaningfully upgrade SLS earnings given more +6%

52W HIGH-LOW AUD31.81 - AUD13.04

conviction in the LT earnings opportunity, as we expect EBIT remains >

FLOAT (%) | ADV MM (USD) 77.5% | 26.75

$200m until at least FY30 with the opportunity in GPU/DDR5 recycling

MARKET CAP AUD5.7B | $4.0B

offsetting any DDR4 volume decline.

TICKER SGM AU

^Prior trading day's closing price unless otherwise

Earnings changes. We upgrade FY26 EBIT 14% to $427m inline with SGM guidance provided noted.

today, particularly driven by NAM Metals and SAR JV. Beyond FY26 we reflect better trading

conditions in the US driving scrap upgrades, as well as meaningful SLS upgrades as we have

more conviction on LT opportunity (see below). SGM noted ANZ conditions remain challenging, FY (Jun) CHANGE TO JEFe JEF vs CONS

and our forecasts for ANZ Metals are unchanged. FY27/28 EPS upgraded +71/+72% driven 2026 2027 2026 2027

by SLS. REV +4% +12% +13% +11%

EPS +16% +72% +23% +27%

US conditions improved. With SLS EBIT guide relatively unchanged, guidance upgrade seems

to be predominantly driven by better US earnings (both SAR and NAM Metals). Better trading 2026 (AUD) 1Half 2Half FY

conditions for ferrous sees us lift trading margin assumptions as well as non-ferrous pricing EPS -- -- 1.42