UPDATE: D.A. Davidson Downgrades Sims Metal to Neutral Ahead of 2H'13 Earnings Report

In a report published Tuesday, D.A. Davidson analyst Brent Thielman downgraded the rating on Sims Metal Management Ltd. (NYSE: SMS) from Buy to Neutral.

In the report, D.A. Davidson noted, “We are lowering our 2H forecast to A$0.02 per share from A$0.33 previously. Ferrous scrap markets remained challenging during the period, with weaker U.S. export volumes, declining prices and continued tight supply conditions. We are now forecasting more significant margin compression for Sims reflecting these conditions. We are also lowering our fiscal 2014 forecasts as detailed below and in the attached model. In addition to market pressures, Sims previously announced a series of additional charges amounting to ~A$115 million or an estimated ~$0.35 per share) which will impact results. These charges include inventory write-downs, impairment charges and other costs associated with restructuring of its U.K. operations.”

Sims Metal Management Ltd. closed on Monday at $8.31.