Macquarie recently updated the price target for Sims following the sell off of its 50% share in LMS Energy.

The sale provides investment capital that will reportedly facilitate further consolidation in the metal business.

The metal recycling firm, Sims, made the announcement of its sale to Pacific Equity Partners for A$272.1 million, achieving a solid valuation at an implied 18.8x trailing EV/EBIT, consistent with its peers.

According to the brokerage, Sims shares took a hit, falling as much as 2.8% to A$13.64, which represents their biggest percentage loss since September 12.

Among analysts, 2 rate the stock as a ‘buy’, 7 as ‘hold’, and 4 as ‘sell’; their median price target stands at A$14.55, as per LSEG data.

Despite this drop, Sims stock has risen 7.2% this year as of their last close.

Sims (ASX:SGM) is a metal recycling company that focuses on the buying, processing, and selling of ferrous and non-ferrous recycled metals.