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Sims Metal Management Limited – FY10 Results
 
Event: Sims Metal Management Limited (SGM) FY10 EBITDA of A$352M (A$259M pcp) came in higher than our expectations of $343M (consensus A$333M) largely as a result of tighter cost control. While SGM continues to improve profitability, with an apparent forced stock build of ~400kt in 4Q09 and our lead indicators and data suggesting a weak 1H11 period, we downgrade our Buy recommendation to a HOLD with a share price target of A$18.50/sh (prev A$24.00/sh) which is 7x our FY11 EV/EBITDA valuation.
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