Sims Ltd (ASX: SGM) shares are on the rise and catching the eye on Wednesday morning.
In early trade, the ASX 200 stock is up 17% to $21.99.
Why is this ASX 200 stock rising today?
For those unfamiliar with Sims, it is a global leader in metal recycling and the provision of circular solutions for technology.
The company notes that it plays a vital role in helping increase circularity and decarbonisation by supplying recycled materials and re-purposed products.
The ASX 200 stock is pushing higher today following the release of a trading update outlining its expected FY 2026 financial performance.
According to the release, Sims expects FY 2026 underlying EBIT for the group to be in the range of $350 million to $400 million.
This will be at least double the underlying EBIT of $174.9 million that the company reported in FY 2025.
A key driver of this will be the company's Sims Lifecycle Services (SLS) division, which is expected to deliver underlying EBIT between $165 million and $185 million. This reflects continued strength in DDR4 secondary market pricing and sustained hyperscaler activity.
Strong pricing tailwinds
Management highlighted that the ASX 200 stock is benefiting from continued price strength in both non-ferrous metals and memory chip markets.
Within its Metal business, strong non-ferrous prices and improved US domestic ferrous prices are helping to offset ongoing pressure from elevated Chinese steel exports, which continue to weigh on scrap prices in export and ANZ domestic markets.
Higher aluminium prices, driven by supply concerns, have also contributed to improved Zorba prices.
Second half improvement expected
Sims expects a materially stronger performance in the second half of FY 2026, particularly across its North America Metals (NAM) and Sims Asia Pacific (SAR) operations.
This follows what management anticipates will be a strong third quarter.
Based on management's guidance, second-half underlying EBIT will be $228.9 million to $278.9 million, compared to $121.1 million in the first half.
However, the company cautioned that the outlook for ferrous prices in ANZ remains subdued in the near term.
Sims also noted that the operational impact from the Middle East conflict has been relatively limited to date, though it has led to higher shipping and fuel costs.
Following today's move, this ASX 200 stock is now up 42% since this time last year.
The post Guess which ASX 200 stock is jumping 17% on strong FY26 guidance appeared first on The Motley Fool Australia.
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