Sims: Trading update: North America shines, revisiting SLS scenarios

Research evidence excerpt

Sims: Trading update: North America shines, revisiting SLS scenarios

J P M O R G A N Asia Pacific Equity Research

17 June 2026

Sims Overweight

SGM.AX, SGM AU

Trading update: North America shines, revisiting SLS Price (17 Jun 26):A$29.44

scenarios ▲Price Target (Jun-27):A$32.50 Prior (Jun-27):A$30.00

We maintain our Overweight rating on SGM following Wednesday’s update, in

which management upgraded FY26 EBIT guidance to $420-435m, materially Australia

above the prior range of $350-400m provided in March. Continued strength in non- Australia Industrials

ferrous markets and improved ferrous trading conditions in North America has AC Lee Power

translated well to lifting NAM and SAR earnings. While SLS guidance of $170- (61-2) 9003-8725

175m sits a touch below our prior expectations, we view the tightened range as lee.power@jpmorgan.com

more a function of decommissioning timing than any structural demand softening. Dylan Adrian

We remain positive on the outlook for SLS, with the business set to enter an (61-2) 9003-7397

accelerating phase of the 4-5 year data center refresh cycle. Even if resale dylan.adrian@jpmorgan.com

economics were to shift (against SLS’s favour), we estimate a 10% volume uplift Nick Torelli

offsets a 2%pt reduction in the resale revenue take. Our Jun-27 PT lifts to $32.50 (61-4) 6817-5219

on higher near-term earnings. nick.torelli@jpmorgan.com

J.P. Morgan Securities Australia Limited

• North American Metals a positive surprise, again: Both NAM and SAR are

set to deliver a material step-up in 2H earnings on the back of strong operating

Key Changes (FYE Jun)

performances. While Zorba prices have retracted ~20% from recent peaks

Prev Cur Δ

following the announcement of the US-Iran peace deal, we note: 1) our Adj. EPS - 26E (A$) 1.22 1.37 12.8%