DA Davidson Downgrades Sims Metal Management (SMS) to Underperform; Weaker Indicators Reduce Confidence

DA Davidson downgraded Sims Metal Management (NYSE: SMS) to Underperform, price target lowered from $A$14 to A$12.

Analyst, Brent Thielman, said, "Omnisource, the metals recycling division of Steel Dynamics (Nasdaq: STLD), recently reported Q1 operating income of $25 million ($15 per ton), essentially half of the $49 million ($30 per ton) reported in the prior year. Based on our own surveys and recent commentary from industry peers, processors continue to pay relatively high prices to procure scrap material while data indicates current prices paid by consumers (mills) are lower year-over-year. The weaker Omnisource results (Sims also has a considerable North American footprint), combined with softening ferrous scra prices in April and higher average purchase prices for processors in general, reduce our confidence in near-term estimates."

Cuts FY12 EPS estimate from $0.95 to $0.65 and FY13 from $1.33 to $1.00.

For an analyst ratings summary and ratings history on Sims Metal Management click here. For more ratings news on Sims Metal Management click here.

Shares of Sims Metal Management closed at $15.44 yesterday.

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• Advance Auto Parts (AAP) PT Lowered to $48 at DA Davidson Following 25% Selloff Post Q2 Results
• Keefe, Bruyette & Woods Resumes Canadian Imperial Bank of Commerce (CM:CN) (CM) at Market Perform
• DA Davidson Starts Comfort Systems USA (FIX) at Buy