Morningstar initiates coverage on Australia's Sims with 'high uncertainty' rating

Shares of Australia's Sims SGM.AX rise 1.3% to A$13.98

Morningstar initiates coverage on the world's largest publicly traded metals and electronics recycler

Investment research firm sets price target at A$15.80, rates stock three stars out of five

"We assign Sims no-moat, high uncertainty, and standard capital allocation ratings" — Morningstar

Expect higher scrap prices and better gross margins for its North American segment, reflecting increasing demand for domestic steel and reduced competition from imported steel

U.S. duty rate on steel, aluminium has risen to 25%

Morningstar, however, expects tariffs to diminish at the end of the current administration, resulting in a normalisation of scrap prices and margins

Citi sees Toyota Tsusho America's offer to buy co's competitor Radius Recycling as a positive development for Sims

Citi "neutral" on shares, PT set at A$15.50

1 of 12 analysts rate the stock "buy", 8 "hold" and 3 "sell" or lower; their median PT is A$14.65 – according to data compiled by LSEG

Shares flat at A$13.8 as of last close