Seeking Alpha • Dec 07

Gerdau: Too High In This Macro (Rating Downgrade)

Summary Gerdau S.A. is downgraded to HOLD due to increased valuation, macro volatility, and tariff-driven risks. NA operations drive recent EBITDA growth, but Brazilian margins are pressured by imports, and over 75% of CapEx remains Brazil-focused. GGB's buybacks have supported share price, but yield is unattractive, and upside is now limited to less than 15%. I set a $4/share fair value, recommend entry is lower than before, and see peers as preferable alternatives. Read the full article on Seeking Alpha

Seeking Alpha • Jan 27

Gerdau Steel: Solid Balance Sheet Outweighed By Imports Into Brazil

Summary Gerdau S.A. is rated as a Hold due to mixed market conditions and competitive pressures from imported steel products. GGB's financial outlook is stable but not exceptional, with profitability sensitive to scrap metal prices and cyclical industry factors. GGB's valuation does not present a compelling Buy case, with current market prices offering an insufficient margin of safety. Key risks include intense competition, especially from China and India, and the cyclical nature of the steel industry impacting demand and prices. Read the full article on Seeking Alpha

Seeking Alpha • Dec 18

Gerdau: Continued Underperformance Eventually Going Into An Upside

Summary Gerdau faces challenges from oversupply, geopolitical conflicts, and import pressures, especially in Brazil, impacting its short-to-medium term outlook. Despite these challenges, Gerdau's fundamentals are strong with low leverage, stable dividends, and positive credit ratings, making it a fundamentally safe investment. The company's cost discipline and asset optimization efforts are yielding positive results, with improved utilization rates and promising growth in non-residential construction sectors. I rate Gerdau stock as a "Buy" due to its low valuation, strong fundamentals, and potential for long-term upside, despite macro risks and better alternatives in other sectors. Read the full article on Seeking Alpha

Seeking Alpha • Sep 29

Gerdau Q2: No Prospect Of Robust Improvement In The Short Term

Summary Gerdau released results below expectations, with difficulties in the Brazilian market and stability in the American market. The industry scenario is still quite aggressive with the oversupply of Chinese steel in the Brazilian market. It is not yet possible to say that Chinese incentives will change this. Cost-cutting initiatives and healthy leverage are helping the company get through this difficult time. Read the full article on Seeking Alpha

Seeking Alpha • Sep 03

Gerdau: Demand From The Automotive Industry And Undervalued

Summary Gerdau S.A. is significantly undervalued, benefiting from the automotive industry growth, electric vehicle development, and electrical transmission renovation globally. The company has a strong financial position, with increasing tangible book value per share, positive net income, and long-term free cash flow growth. GGB's strategic asset sales and resource reallocation enhance its financials, while currency advantages from the Brazilian real's decline further improve profitability. Risks include potential goodwill impairments, cyclical steel industry fluctuations, and geopolitical trade changes impacting demand and free cash flow expectations. Read the full article on Seeking Alpha

Seeking Alpha • Jul 22

Gerdau: Underperforming Since My 'Hold' Rating

Summary Valuation remains so-so with potential for double-digit RoR, but better investment options exist due to macro risks and oversupply in the steel industry. Gerdau's performance has softened, underperforming the market by over 38% since the last article a year ago. Quarterly results show growth in EBITDA but declining earnings, leading to a cautious "HOLD" rating. Read the full article on Seeking Alpha

Seeking Alpha • May 08

Gerdau: Cheap Stock Void Of Direction

Summary Gerdau's stock is currently trading at a similar level to three years ago, indicating limited growth potential. The company is experiencing growth trends in multiple markets, including the North American market and the special steel market. Gerdau's valuation remains compelling, with attractive multiples and strong cash generation, but technical indicators suggest consolidation rather than a bullish move. Read the full article on Seeking Alpha

Seeking Alpha • Feb 10

Gerdau: Infrastructure Spending Could Fuel Growth In Face Of Cheap Chinese Steel

Summary Gerdau S.A. faces short-term challenges due to cheap Chinese steel exports but should benefit from significant infrastructure spending in the US and Brazil. GGB has significant exposure to the US market, which accounts for more than half its gross profits and should offset the impacts of Chinese steel exported to Brazil. Gerdau has a strong balance sheet and is well-capitalized to ride out these challenges and then benefit from the increased government spending in its key markets. Read the full article on Seeking Alpha

Seeking Alpha • Jan 31

Gerdau S.A.: Assessing If Storm Clouds Are Beginning To Form (Technical Analysis)

Summary Gerdau's dividend yield has decreased to 7.43% and the buyback program has ended, leading to diminished shareholder returns. Adverse macro trends and increased competition in the Brazilian market pose significant challenges for Gerdau's profitability. Gerdau's technical charts indicate potential weakness in the stock in the near future, despite remaining in a long-term bull market. Read the full article on Seeking Alpha

Seeking Alpha • Nov 16

Gerdau: Q3 Earnings, Limited Short-Term Catalysts, Raises Concerns

Summary Gerdau's 3Q23 results revealed continued weakness in most operating figures, with a downward trend on both sequential and year-on-year basis. Challenges stem from diminished steel demand within Brazil and increased competition from Chinese steel, leading to a pricing battle in the domestic market. The company is grappling with increased capital expenditures for maintenance and expansion, contributing to concerns about short-term cash flow generation. Despite Gerdau's appealing dividend, the combination of rising CapEx and contracting EBITDA makes the company less compelling for a dividend portfolio, warranting a neutral stance with a slightly more pessimistic outlook. Read the full article on Seeking Alpha

Seeking Alpha • Sep 19

Gerdau: Valuation Matters In The Downturn

Summary Gerdau, a Brazilian steel giant, has faced challenges in 2023 due to a significant slowdown in domestic steel demand and uncertainties driven by China's economy. Despite these challenges, Gerdau has managed its finances well, maintaining a healthy balance sheet with a strong focus on capital management and a comfortable debt structure. While the company's long-term outlook remains attractive, its stock valuation has risen compared to previous years, making it less compelling for short-term investors. GGB has estimated an 8.9% dividend yield for 2023. However, there is a projection of a gradual decrease in dividends for the next two years due to cash generation challenges. Read the full article on Seeking Alpha

Seeking Alpha • Aug 15

Gerdau: Still Performing, But I'm Still Careful And May Rotate Here

Summary Gerdau has outperformed the market in the past year but underperformed since the last article. The company's latest results show a softening sales and shipment trend, even if the results are actually solid given the environment. I am considering rotating out of Gerdau due to macro risks and the availability of safer investment options, due to the trajectory of company earnings on a forward basis. Read the full article on Seeking Alpha

Seeking Alpha • May 26

Gerdau Is Positioned For Long-Term Success

Summary Gerdau has vastly trailed the stock market in the last five years. However, GGB's dividend issuance is so strong that total shareholder returns have closed the gap on the market. Gerdau’s free cash flow generation easily supports dividend growth. The firm’s capital cycle evolution is tending toward capital exits and rising profitability and returns. The firm is trading at an attractive multiple, with very cheap free cash flows. Read the full article on Seeking Alpha

Seeking Alpha • Feb 07

Gerdau: Remains A Solid Income Play

Summary Gerdau's forward yield now tops 10%. Free cash-flow numbers remain buoyant. Shares have temporarily topped. Q4 earnings numbers now crucial to ensure the pattern of higher lows can continue. Intro If we pull up a chart of Gerdau S.A. (GGB), we can see that the steelmaking company looks to have topped out at least temporarily. However, the stock's rising 200-day moving average as well as its recent pattern of higher lows and higher highs leads us to believe that downside risk is limited here. In fact, when one studies the numbers and recent earnings reports, the sustained pattern of higher lows and higher highs that we have basically seen since early 2020 are aligned with how the company's fundamentals have been improving. The financial performance of the first three quarters of this fiscal year was the best in Gerdau's history and if cash-flow trends (Which we will get into) are anything to go by, we expect to see gains continuing for some time. Furthermore, despite Gerdau's very strong start to 2023, shares continue to trade on the cheap. The company's trailing price-to-sales ratio comes in at 0.64 and price to book ratio comes in at 1.11. Suffice it to say, given Gerdau's valuation and the money it is making at present, we recommend that investors do not become overly concerned with Gerdau's forward-looking expected growth rates. Gerdau Technical Chart (Stockcharts.com) Solid Cash Flow Generation If we just take the recent third quarter and how cash flowed through the company, we see that Gerdau generated over $600 million of operating cash flow of which close to $200 million was used for capex purposes. The three main priorities from a capital expenditure standpoint are competitive raw materials procurement, tailoring production to customer demand, and being able to offer an increasing amount of value-adding products to the mix over time. However, what about the remaining $400 million approx. of free cash flow which was generated in Q3? This cash (after capex was spent which is essentially funds to maintain or upgrade the business) continues to be used to improve Gerdau's position for the better. Approximately, $222 million was paid to investors in the form of dividends in Q3, $112 million of stock was repurchased and close to $25 million was put toward the company's debt load. All three of these actions benefit shareholders as Gerdau's forward dividend yield now comes close to 11%, EPS continues to rise due to a lower share count and Gerdau's liabilities continue to come down. Suffice it to say, the lower the stock's valuation and the healthier the company's debt profile, the less downside risk will be inherent in this play when the eventual downswing occurs. In saying this, the forward-looking revenue estimates for example as we see below remain encouraging despite the negative rolling quarter top-line growth which is expected in Q4 and beyond in fiscal 2023. Gerdau Consensus EPS Estimates (Seeking Alpha) Strategy So here is how we see a potential investment in Gerdau at this moment in time. Being a low-priced stock (Approximately $6), investors have the opportunity to buy an asset that is currently paying out a double-digit dividend yield. Furthermore, despite the fact that the stock's implied volatility is well below average in GGB at present (39.5%), this stock is optionable which means investors can also bring down their cost basis through repeated covered call writing. At the end of the day, GGB offers income-orientated investors the opportunity to buy an income-generating asset at a very attractive valuation.

Seeking Alpha • Dec 07

Gerdau: A Solid Play At The Right Price, Just Not Now

Summary I've checked on Gerdau a few times. My last report on the company saw it as a "Buy", and it has absolutely smashed the market. I'm changing my overall thesis on Gerdau, given a 34.7% total RoR, outperforming the market by nearly 40%. My new rating is "Hold" - and I'll explain why here. Dear readers/followers, I've updated on Gerdau (GGB) a number of times at this point, shifting my stance from "Hold" to "Buy" back on the 9th of August this year, and bought shares. The company and my investment since then have absolutely smashed expectations and the market overall. Here is the RoR since that time, despite some unfortunate timing in the short term. Gerdau Article RoR (Seeking Alpha) The time has come to provide an update for the company - and this recent action warrants this. Let's see why I'm not shifting my thesis for Gerdau. Revisiting Gerdau To my mind, the name sounds German - because there's actually a municipality there known as Gerdau in Lower Saxony. In this case, though, Gerdau is a steel producer based in Latin America and headquartered in Brazil. A company that comes with 120 years of mostly solid history. Gerdau IR While the company was actually founded by a German, an immigrant leaving for Brazil in 1870, it's been a Brazilian company since its inception in 1901. In the beginning, it was a nail factory. Gerdau is one of the world's 30 largest steel producers, with annual revenues of around $11-$14 billion, 30,000 employees, and a net income of north of half a billion USD per year. The company is incredibly volatile, seeing bounces in EPS, income, and revenues that move in accordance with market cycles - and these market cycles are no joke. The company can, at times, stay in negative earnings cycles for 6-7 years, as cycles "depress", only to then give way to truly massive bounces that call into question just how high things can go - and what valuation the company may hold. The recent trends are a very good example of this. Gerdau earnings (F.A.S.T Graphs) From a fundamental perspective, Gerdau has a high yield, investment-grade safety at a BBB- and has had an international presence on the market for over 40-50 years at this point, with a very early expansion strategy. Current operations are spread to 13 countries. Gerdau mine iron ore, as well as transforming steel scrap and iron ore into steel products. Steel production around the globe is split into integrated and non-integrated mills, where integrated mills produce steel from iron oxide extracted from ore, whereas non-integrated mills produce their steel from scrap steel. Over 70% of global steel production, most of which is currently done in China, is done through the integrated process. Remember, the ebb and flow of steel production from a macro level has been increasing in lock-step with population growth and industrialization in emerging countries, increasing by 51.3% from the period of 2009-2019 alone. It's a market characterized by demand increases, and the current heaviest consumer of steel is China. Brazil, in turn, is the world's 9th-largest producer of crude steel. However, the demand from China is changing significantly, which impacts the company. Gerdau IR (Gerdau IR) Overall, the steel industry across the world as well as in NA has seen massive consolidation over the past decade/s. There have been large amounts of M&As, where steel producers burdened with massive pension liabilities, healthcare, and other costs have been bought up. Companies that exemplify this include Mad-Men-known Bethlehem Steel Corporation, Trico Steel Co, National Steel Corporation, LTV Corporation, and others, many of which were folded into ArcelorMittal (MT). At this point, only a few large producers with real competitiveness remain on the market, and Gerdau is one of them. Recent results confirm the company's improvements in profitability, which is something we're looking for. Gerdau IR (Gerdau IR) Because as we're seeing now, the cycle is starting to reverse a bit. Shipments, net sales, and adjusted EBITDA are all starting to fall. The company's shipments are down nearly 10% YoY for 3Q22, net sales are down a percent or so, and EBITDA is down around 20-23% on a YoY/QoQ. Gerdau IR (Gerdau IR) The positive is that the company is showing more resilience in terms of margins, which is what we want to see to flatten out some of the downcycles in the company. On a segment basis, Brazil was one of the more negative, while NA was positive, and special steel delivered decent results as well, with a company asset utilization rate of around 60-62% on average. South America - ex-Brazil was a positive as well. Overall cash flow was down - but still came to impressive levels, with 58% of quarterly FCF invested in shareholder returns and company buybacks. The company's cash conversion cycle saw some increases due to the aforementioned lower net sales and demand compression Perhaps more importantly at this point in the cycle, the company's debt is lower now at 0.18x, which is the lowest historical level it has ever been, with company liquidity and revolvers over $R11B. The company is currently at a very high point for its shareholder return cycle - as I've mentioned before because the dividend and buybacks are so high. This will change going forward. Gerdau IR (Gerdau IR) Remember the fundamental risks to the business - because these are not small when considering this business as an investment. The iron/steel market is inherently volatile, best expressed by viewing this company's earnings and sales over time. The Brazilian Real (R$) is not exactly known as the most universally stable currency, and over 50% of company earnings come from Brazil. The company's FX exposure is massive. Nor is Brazil inherently known as the most geopolitically stable region, with plenty of ups and downs. While the company's current debt level seems low thanks to high earnings, actual total debt is relatively high. With a high cost of capital and a historically low ROCE compared to a relatively high WACC of well over 9% at this point, the company has had a hard time, outside of this crisis, really driving shareholder returns. This is a problem, and not a small one. These risks do lessen as the company performs better, and seeks to flatten its typically volatile cycles. Indeed, current expectations are for the downcycle to go slower and not dip as far as it perhaps did before. Gerdau operates a total of 30 mills worldwide as of 2020. 26 of these are mini-mills, and despite their lower portion of global production, these offer capital advantages to Gerdau in the form of lower capital and operational costs, the proximity of production to raw material, proximity to local markets, and easier managerial structure. Four of the mills are integrated - three in Brazil and One in Peru, with the Ouro Branco Mill being the largest. All of these things mean that Gerdau is perhaps one of the better-prepared companies in its sector in the entire market - but as things stand now, we're at a turning point where earnings have started to and may continue to dip lower going forward. Let's look at what this does to the company's current valuation. Gerdau's Valuation The company currently trades at a normalized P/E of 4x - but roughly the same share price was a normalized P/E of 35x back in 2019, showcasing just how little we can really look at P/E to rightfully consider such a volatile business and its valuation. Gerdau's valuation in terms of its earnings is a volatile history with very little, if any stability found anywhere. While 2021E is going to see a high dividend, you need only look at 2016-2017 to find that one-cent dividend yield together with extremely pressured earnings. Other contributors have made articles about this company, focusing on singular multiples or what I view as relatively simple forecasts. I argue this cannot be made as simple as that. Forecasting Gerdau on the basis of EPS, or the basis of BV multiples is tricky.

Seeking Alpha • Nov 09

Gerdau reports Q3 results

Gerdau press release (NYSE:GGB): Q3 Adjusted net income of R$3.02B. Revenue of R$21.15B (-0.8% Y/Y).

Seeking Alpha • Sep 27

Gerdau Could Thrive Amidst Weakening Demand For Steel

Summary Gerdau is one of the world’s largest steelmakers. The company has shown it can grow profitability over the last decade. The company’s financial position gives it strength to survive and even thrive in a period of weakening demand. Gerdau’s free cash flow yield is a very attractive 29.89%. Brazilian long steel producer, Gerdau S.A. (GGB) is Brazil's largest steelmaker, and one of the largest in the world. Despite growing profitability over the last decade, the company has underperformed the B3 SA and Russell 3,000. Nevertheless, given inflation, and the risk of weakening demand for steel, Gerdau is well placed to take advantage of weaknesses in other steelmakers, and to thrive under these conditions. With free cash flows trading at a yield of some 29.89%, the company is a very attractive proposition. Gerdau is a tale of underperformance. In the last 5-years, the Brazilian steelmaker has gained just 25.36% at the time of writing, compared to 59.65% for the B3 S.A and 41.08% for the Russell 3000. Google Finance In the year-to-date, Gerdau is down 10.79%, while the B3 S.A. is up 18.84%, and the Russell 3000 is down 24.78%. While the company's dividend yield of 12.72% will go a long way toward healing some of the hurt of this year's performance, that depends largely on how low the company's share price will go in the last four months of the year. Barring a spectacular last few months of the year, investors are likely to experience pain in holding the company's stock. However, there is a case to be made that the company will be a long-term stock market winner and that the share price decline has made Gerdau more attractive. Steel firms should be analyzed as part of the industry, because they are price-takers in a market that follows the Kaldorian cobweb model, in which there is a large time lag between production decisions and price responses. This leads to a highly cyclical industry in which businesses expand production in response to rising prices, often overshooting their estimates of demand, leading to a glut in supply, a popping of the bubble, and an exit of capital until profitability returns to the market. Price volatility and inventory write-downs are common to the business. In an environment of rising inflation, there is an argument to be made that demand for steel will decline, and this will impact the company's profitability. Indeed, the World Steel Association forecasts demand will grow by just 0.4% in 2022, rising to 2.2% in 2023. That is a real risk, but it also presents an opportunity: steelmakers will be less inclined to expand production needlessly, out of fear that they will not be able to shift all their products. With greater capital restraint, future returns are likely to be greater. Firms that are not in good financial health will be forced out of the business, because they won't have the alibi of rising prices to keep on going. So we are likely to see capital exiting, through consolidations and perhaps even bankruptcies. Given the inverse relationship between asset growth and future returns, a decline in output for the industry may not be a bad thing. The decade of growth since 2010 that has helped steelmakers such as Gerdau, has come to an end. The winners will be firms like Gerdau who have found a way to grow profitability in that era. Gerdau's Business Founded in 1901 by João Gerdau, Gerdau is now the 30th largest steelmaker in the world. The firm has steel mills in Brazil, Argentina, Canada, Colombia, the Dominican Republic, Mexico, Peru, the United States, and Uruguay. The company operates 32 units of steel production, and produces 11 million tons of scrap steel from its Brazilian operations and abroad. Investor Presentation, September 2022 Gerdau's Strong, Decade-Long Financial Performance Gerdau's poor market performance has been despite its profitable growth in the last decade. Gerdau has grown revenues from R$37.98 billion in 2012, to nearly R$78.35 billion in 2021, at a compound annual growth rate ((CAGR)) of just over 7.5%. (Filing currency is Brazilian real, for example, in the 2021 annual report). According to Credit Suisse's The Base Rate Book, this puts it in line with the 10-year revenue CAGR of 28.3% of firms. Credit Suisse The company's gross profitability has risen from an anemic 0.089 in 2012, to more than 0.28 in 2021. This is still below the 0.33 threshold that Robert Novy-Marx's research says indicates an attractive company. Gross profitability for industrial firms tends to be around 0.3. Operating profit margin has risen from 6.2% in 2012 to 24.5% in 2021. The median operating profit margin for industrials is 9%. Aswath Damodaran's data shows that the steel industry has an operating profit margin of 13.98%. Gross margins have risen from 12.5% in 2012 to 26.6% in 2021. According to Damodaran's data, the steel industry has a gross margin of 23.6%. Net income has risen from nearly R$1.43 billion in 2012 to nearly R$15.5 billion in 2021, compounding at 26.95% over that decade. Just 5.1% of firms achieved similar results between 1950 and 2015. Credit Suisse Gerdau's growing profitability is reflected in its return on invested capital ((ROIC)), which has risen from 5.3% in 2012 to 39.2% in 2021. As the economics of steel has grown to favor the company, it has generated rising amounts of free cash flow ((FCF)), with FCF growing from nearly R$2.29 billion in 2012, to nearly R$13.64 billion in 2021, at a 10-year FCF CAGR of 19.56%. Gerdau Could Play a Key Role in the New Era China and India are two of the largest steel producers in the world. While in the past, China was seen as a purely virtuous source of cheap inputs, in the age of looming conflict between the United States and China, relying on Chinese steel comes with a silent risk. World Steel Association Investors have too often been caught off guard by broader geopolitical moves. Investors and managers who bet heavily on Russia, are finding that those bets were largely misguided. We have entered an era in which we have to take geopolitical considerations into account when making capital allocation decisions. In Europe, businesses are starting to factor in geopolitical risk as part of their supply due diligence. This is important in the context of the United States' deteriorating relationship with China, and the rising possibility of a Sino-American War over Taiwan. As China prepares for war over Taiwan, Admiral Philip S. Davidson, Former Commander, U.S. Indo-Pacific Command has warned that China will invade Taiwan within the next decade. That will dramatically change the supply chains of the United States and the European Union, who will be forced to look within, environmental laws notwithstanding, and to friendly countries, to meet their steel needs.

Seeking Alpha • Aug 09

Gerdau: Still Some Questions, But Now A 'Buy'

In this article, it's time to update my thesis on the company Gerdau S.A., a steel company that I've written about twice in the past. Gerdau has always been a bit high risk - even in the steel sector, where risk is certainly part of the equation. Let's review Gerdau and see what we have here after the recent set of results. Dear readers, The time has come to update my thesis on the company Gerdau S.A. (GGB), a business in the steel sector. In my previous article on the company, I called the company a relatively risky play given some of the credit rating deficiencies as well as some of the geographical risks and macro. As I've mentioned before, investing in companies in Brazil is always a bit of a risk due to currency and potentially volatile markets - though it's equally dangerous to completely overplay these risks and ignore the market and individual company valuations entirely, as some investors want to do. Revisiting Gerdau When looking at Gerdau, it's important to remember positives as well as challenges. There are plenty of positives that make Gerdau a convincing play if you're prepared to consider the risks. This is an investment-graded Brazilian steel producer with expansive international operations and 40-50 years' worth of experience. Whatever challenges the modern world and its market can think to throw at individual companies - Gerdau has seen and experienced them firsthand, especially being in a relatively volatile geography such as Brazil. Being a family-controlled company also brings with it some of the upsides - as well as downsides of such a venture, including a lack of shareholder control, but a highly vested interest in things like the dividend. Still, commodities such as steel, as with other commodities like aluminum, copper, and other metals, are bound to have certain upsides in the market environment we're now clearly entering. These investments tend to hold their levels far better than some other sectors, given the relative pricing power of the companies. Some basics first - as I mentioned in my first article on the company, steel as a sector has a high correlation to population and industrial growth, which is why the market for it has been very lucrative for the past two decades or so. China has seen explosive demand due to its bubble in Real estate, and while China may be on its way down, there is still a high continued demand for steel. Gerdau also produces within one of the most appealing steel geographies in the world, with Brazil being the 9th-largest producer worldwide of steel. This also isn't an easy sector to be in, which is why we've seen such a degree of consolidation over the past 20-40 years. Steel in other parts of the world hasn't seen great trends, on a company-wide level. Companies that exemplify this include Mad Men-known Bethlehem Steel Corporation, Trico Steel Co, National Steel Corporation, LTV Corporation, and others, many of which were folded into ArcelorMittal (MT). Only the largest and most efficient producers, or producers found in low-cost regions end up remaining in this sector. Of course, this is actually a potential positive for Gerdau, together with the current macro. This is because Gerdau can produce cheaper than most of its peers, and given the current trends, it's unlikely that this will change in the near term. This has granted the company some positives over the past few quarters, and its transformational journey is ongoing. 2Q22 results are in - and these results are good despite current issues. While higher Brazil inflation and worldwide macro heighten the risks. The company is seeing a slowdown in China due to COVID-19 restrictions. There was also a pricing decline with trends in Turkish rebar, raw materials, as well as scrap and pig iron prices. These prices have essentially corrected somewhat. Still, shipments, sales, EBITDA, net income, and margins are all up. Gerdau IR (Gerdau) The company recorded the best quarter in history for the company's NA division, meaning 42% of consolidated EBITDA. The company saw very healthy dynamics in industrial and infrastructure trends as well as construction, with leading indicators pointing to even stronger growth thanks in part to accelerated infrastructure spend. This doesn't take away from the logistical and labor challenges the company is seeing, but it's still projecting a very strong steel demand, with a large order backlog. The US infrastructure bill should start seeing its first effects by the end of 2022, or early 2023. The special steel segment is seeing some impressive growth as well. Gerdau IR (Gerdau) Brazil saw impressive trends as well, with increasing trends and good outlook. Volumes are at stable levels, and the company expects continued upside from residential and energy sectors, with plenty of demand from the infrastructure sector. South America ex-Brazil meanwhile had the best quarter in history and expects continued upside from both Argentina and Uruguay, with continued stability and demand from Peru as well. The company managed over R$3B of FCF in the quarter, or a 14% net sales margin for the quarter. This is also the 9th consecutive quarter of positive FCF, with the 2nd lowest financial cycle for 2Q in the last 10 years. This also puts the leverage at 0.18X, which is the lowest leverage ratio ever recorded by Gerdau. The company has an average debt term of 8 years, with a 7.6% average weighted cost. This might sound high from an EU/NA perspective, but it's not that high for the context the company operates in. The company is also in an excellent position to continue its generous dividend policy, coupled with excellent shareholder buybacks. Gerdau IR (Gerdau) All this puts the company in a superb position. I highlighted in my previous article that the company is currently in a part of the cycle where it is performing with a very high RoIC, meaning that most of the other corresponding key variables are also positive. I do go into some fundamental risks in my original piece... The iron/steel market is inherently volatile, best expressed by viewing this company's earnings and sales over time. The Brazilian Real (R$) is not exactly known as the most universally stable currency, and over 50% of company earnings come from Brazil. The company's FX exposure is massive. Nor is Brazil inherently known as the most geopolitically stable region, with plenty of ups and downs. While the company's current debt level seems low thanks to high earnings, actual total debt is relatively high. With a high cost of capital and a historically low ROCE compared to a relatively high WACC of well over 9% at this point, the company has had a hard time, outside of this crisis, really driving shareholder returns. This is a problem, and not a small one. (Source: Seeking Alpha article, Gerdau) I will continue to argue that some of these risks have grown smaller as the company has been granted ample elbow room to address its actual debt with the advantage of massive earnings - enough to make share buybacks. I will also go on record saying it's difficult to say when exactly the problematic macro situation, characterized by high demand and inflation, is likely to wind down or to end - but that the company is appealing here - and the appeal at this point, with the company's recent quarterly, is getting even higher. Since my last article on Gerdau, the company has dropped close to 15%. That brings the valuation to the following situation. Valuation for Gerdau This does not take away from an extremely volatile earnings history, but the fact is that over the past 20 years, the company has clearly outperformed broader markets, coming in at an over 12% annualized RoR. What's even better, the company shows no indication of being grossly overvalued as they did prior to the 2007-2009 financial crisis. Gerdau is, in fact, extremely undervalued at this juncture. The current valuation has the market putting Gerdau at no more than a 3x P/E, which is ridiculous for this company. There is the matter of the company's earnings being elevated for 2022 still, but I don't see the company being worth this little. After a 15% drop-off, Gerdau has become incredibly appealing, now trading below $5/share. I actually shared this in my last article - that the company becomes a "BUY" at $5/share, and I'm now backing this stance with cash injections.

Seeking Alpha • Aug 02

Gerdau Q2 2022 Earnings Preview

Gerdau (NYSE:GGB) is scheduled to announce Q2 earnings results on Wednesday, August 3rd, before market open. The consensus EPS Estimate is $0.44 (-0.66% Y/Y) and the consensus Revenue Estimate is $4.2B (+13.79%). Over the last 3 months, EPS estimates have seen 1 upward revision and 0 downward. Revenue estimates have seen 3 upward revisions and 0 downward.

Seeking Alpha • May 17

Macro And Conflicts Set Upside Potential For Gerdau S.A.

I wrote about Gerdau S.A. before the Ukrainian war as well as current macro developments, calling it too uncertain a steel choice to be of value. In the current macro, my assessment of the company's potential has shifted. I currently consider Gerdau worth looking into, and I view a long-term upside as likely. The company is sub-par in terms of credit, but has certain upsides that might warrant investing here.

Seeking Alpha • Mar 04

Gerdau Worth Another Look As Healthy Demand Leads To A More Gradual Down-Cycle

Gerdau posted modestly better than expected Q4'21 results, and provided both encouraging guidance for FY'22 and positive commentary on its major markets. Construction demand is sustaining both the Brazilian and North American operations, and Gerdau is leveraged to improving manufacturing in Brazil and future infrastructure spending in the U.S. Management has prioritized efficient operations and capital disciplines, and the benefits are starting to accrue, with record margins in North America and improving liquidity. Gerdau shares look undervalued below the mid-$6's; high energy prices are a threat to global growth, but the risk/reward balance still favors Gerdau.

Seeking Alpha • Dec 26

Gerdau - Not My Current Steel Choice

A follower requested me to look at Gerdau S.A following some significant periods of share price pressure to see whether now could be a good time to invest. I would argue that your desire to invest in a company like Gerdau should be proportional to your risk and volatility tolerance. Gerdau has some appealing aspects of its business - and as a whole, i'm bullish on South America in the long term. However, risk factors do exist - and usually we want more safety. Learn my future stance on Gerdau.

Seeking Alpha • Sep 08

Gerdau Set For Record Cash Flows, But Investors Seem To Have Moved On

Gerdau had a very strong second quarter, and free cash flow is likely to remain exceptionally strong on a relative historical basis for 2021-2023 before a more pronounced correction. In the near term, Brazilian demand is benefiting from strong activity in construction and recovering industrial demand, but steel consumption is already back above 2019 levels. U.S. demand for long steel is likely to remain strong for several years, as incremental demand from infrastructure projects is likely to be a significant percentage of installed capacity. China remains a key variable; the government is pushing for more capacity curtailment, and long steel could see the brunt of that. Gerdau looks undervalued on both discounted free cash flow and EV/EBITDA, but the market seems to be in a "post-peak" mindset, and that's a tough place to make money short term.

Seeking Alpha • Jun 22

Gerdau: Further Gains On The Cards

This steelmaker reported record EBITDA for the first quarter. The company plans to double down on Brazilian demand due to strength in principal steel segments. Increased profitability resulted in a big hike in the dividend for Q1. More growth to follow.

Pourcentage du salaire du PDG	n/a
Durée du mandat du directeur général	8.3yrs
Propriété du PDG	0.004%
Durée moyenne d'occupation des postes de direction	2.8yrs
Durée moyenne du mandat des membres du conseil d'administration	5.5yrs

Nom	Position	Titularisation	Compensation	Propriété
Gustavo Da Cunha	Member of Board of Executive Officers	8.3yrs	pas de données	0.0045% $ 401.2k
Claudio Gerdau Johannpeter	Independent Vice Chairman of the Board	18.1yrs	pas de données	0.0044% $ 391.3k
Marcos Eduardo Wahrhaftig	Executive VP of Strategy	no data	pas de données	pas de données
Rafael Lopes	Vice President of Board of Executive Officers & Executive VP	less than a year	pas de données	0.0069% $ 615.2k
Rafael Japur	Member of Board of Executive Officers	4.3yrs	pas de données	0.0052% $ 463.9k
Cesar da Rosa Peres	Member of Board of Executive Officers & Commercial Officer of Gerdau Steel Brasil	no data	pas de données	0.00041% $ 36.7k
Wendel da Silva	Member of Board of Executive Officers and Director of Mining & Raw Materials	no data	pas de données	0.0064% $ 571.3k
Flavia da Silva de Souza	Member of Board of Executive Officers	1.3yrs	pas de données	0.00080% $ 71.6k
Mauricio Metz	Member of Board of Executive Officers & Executive VP	1.3yrs	pas de données	0.0021% $ 189.0k
Clemir Uhlein	Accounting Director	no data	pas de données	pas de données
Fabio de Pieri Spina	Legal Director	no data	pas de données	0% $ 0
Pedro Torres Pinto	Head of Corporate Communication	6.8yrs	pas de données	pas de données

Nom	Position	Titularisation	Compensation	Propriété
Gustavo Da Cunha	Member of Board of Executive Officers	7.1yrs	pas de données	0.0045% $ 401.2k
Claudio Gerdau Johannpeter	Independent Vice Chairman of the Board	18.1yrs	pas de données	0.0044% $ 391.3k
Andre Gerdau Johannpeter	Chairman of the Board	18.3yrs	pas de données	0.018% $ 1.6m
Alberto Fernandes	Independent Director	3.9yrs	pas de données	0.00027% $ 24.2k
Guilherme Chagas Johannpeter	Vice Chairman of the Board	no data	pas de données	0% $ 0
Herculano Alves	Member of Fiscal Council	less than a year	pas de données	pas de données
Claudia Ramirez	Independent Director	7.1yrs	pas de données	0.0011% $ 95.8k
Gilberto Monticelli	Member of Fiscal Council	1.1yrs	pas de données	pas de données
Diego Marchetti Santos Chaves	Member of Fiscal Council	less than a year	pas de données	pas de données

Données	Dernière mise à jour (heure UTC)
Analyse de l'entreprise	2026/05/06 11:31
Cours de l'action en fin de journée	2026/05/06 00:00
Les revenus	2026/03/31
Revenus annuels	2025/12/31

Paquet	Données	Cadre temporel	Exemple de source américaine ^*
Finances de l'entreprise	10 ans	Compte de résultat Tableau des flux de trésorerie Bilan	Formulaire 10-K de la SEC Formulaire 10-Q de la SEC
Estimations consensuelles des analystes	+3 ans	Prévisions financières Objectifs de prix des analystes	Rapports de recherche des analystes Blue Matrix
Prix du marché	30 ans	Cours des actions Dividendes, scissions et actions	Données de marché ICE Formulaire S-1 de la SEC
Propriété	10 ans	Actionnaires principaux Délits d'initiés	Formulaire 4 de la SEC Formulaire 13D de la SEC
Gestion	10 ans	L'équipe dirigeante Conseil d'administration	Formulaire 10-K de la SEC Formulaire SEC DEF 14A
Principaux développements	10 ans	Annonces de l'entreprise	Formulaire 8-K de la SEC

Analyste	Institution
Leonardo Correa	Barclays
Mary Cleia da Silva	BB Banco de Investimento S.A.
Caio Ribeiro	BofA Global Research

Gerdau Gestion

Gestion contrôle des critères 2/4

Informations clés

Mises à jour récentes de la gestion

Gerdau S.A., Annual General Meeting, Apr 15, 2026

Gerdau S.A., Annual General Meeting, Apr 10, 2025

Gerdau S.A., Annual General Meeting, Apr 16, 2024

Gerdau S.A., Annual General Meeting, Apr 17, 2023

Recent updates

Gerdau S.A. Approves Dividend Distribution, Payable on June 9, 2026

Gerdau S.A. (BOVESPA:GGBR4) agreed to acquire additional 23.03% stake in Dona Francisca Energética S.A. from Centrais Elétricas de Santa Catarina S.A. (BOVESPA:CLSC4) for an enterprise value of BRL 150 million.

Gerdau S.A., Annual General Meeting, Apr 15, 2026

Gerdau S.A. to Report Q4, 2025 Results on Feb 23, 2026

Gerdau: Too High In This Macro (Rating Downgrade)

Gerdau S.A. Announces Dividend Distribution Based on Third Quarter of 2025 Results

Gerdau S.A., Annual General Meeting, Apr 10, 2025

Gerdau S.A. Announces Dividend Distribution to Be Paid Based on Fourth Quarter 2024 Results, Payable on March 14, 2025

Gerdau S.A. (BOVESPA:GGBR4) completed the acquisition of remaining 41.23% stake in Gerdau Summit Acos Fundidos e Forjados S.A. from Sumitomo Corporation (TSE:8053) and The Japan Steel Works, Ltd. (TSE:5631).

Gerdau Steel: Solid Balance Sheet Outweighed By Imports Into Brazil

Gerdau: Continued Underperformance Eventually Going Into An Upside

Gerdau S.A. to Report Q3, 2025 Results on Oct 30, 2025

Gerdau S.A. (BOVESPA:GGBR4) entered into an agreement to acquire remaining 41.23% stake in Gerdau Summit Acos Fundidos e Forjados S.A. from Sumitomo Corporation (TSE:8053) and The Japan Steel Works, Ltd. (TSE:5631) for $32.6 million.

Gerdau S.A. to Report Q4, 2024 Results on Feb 19, 2025

Gerdau S.A. Declares Dividend