BOVESPA:GGBR4

Stock Analysis Report

NOT FOR DISTRIBUTION
Header cover image

Executive Summary

Gerdau S.A. provides steel products and services in the United States and Canada. More Details


Snowflake Analysis

Mediocre balance sheet with questionable track record.


Similar Companies

Share Price & News

How has Gerdau's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: GGBR4 is not significantly more volatile than the rest of BR stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: GGBR4's weekly volatility (6%) has been stable over the past year.


Market Performance


7 Day Return

7.9%

GGBR4

6.1%

BR Metals and Mining

-0.4%

BR Market


1 Year Return

29.9%

GGBR4

39.6%

BR Metals and Mining

1.4%

BR Market

Return vs Industry: GGBR4 underperformed the BR Metals and Mining industry which returned 39.6% over the past year.

Return vs Market: GGBR4 exceeded the BR Market which returned 1.4% over the past year.


Shareholder returns

GGBR4IndustryMarket
7 Day7.9%6.1%-0.4%
30 Day-1.9%9.1%4.9%
90 Day17.5%16.9%6.0%
1 Year30.8%29.9%47.4%39.6%4.7%1.4%
3 Year114.4%103.8%118.2%96.1%54.9%38.3%
5 Year305.8%282.1%504.5%428.0%145.9%106.9%

Long-Term Price Volatility Vs. Market

How volatile is Gerdau's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Gerdau undervalued compared to its fair value and its price relative to the market?

27.14x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: GGBR4 (R$22.62) is trading above our estimate of fair value (R$11.99)

Significantly Below Fair Value: GGBR4 is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: GGBR4 is poor value based on its PE Ratio (27.1x) compared to the BR Metals and Mining industry average (22.2x).

PE vs Market: GGBR4 is poor value based on its PE Ratio (27.1x) compared to the BR market (15.5x).


Price to Earnings Growth Ratio

PEG Ratio: GGBR4 is poor value based on its PEG Ratio (2.3x)


Price to Book Ratio

PB vs Industry: GGBR4 is overvalued based on its PB Ratio (1.2x) compared to the BR Metals and Mining industry average (1.1x).


Next Steps

Future Growth

How is Gerdau forecast to perform in the next 1 to 3 years based on estimates from 13 analysts?

11.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: GGBR4's forecast earnings growth (11.7% per year) is above the savings rate (10.7%).

Earnings vs Market: GGBR4's earnings (11.7% per year) are forecast to grow slower than the BR market (27.1% per year).

High Growth Earnings: GGBR4's earnings are forecast to grow, but not significantly.

Revenue vs Market: GGBR4's revenue (6.7% per year) is forecast to grow slower than the BR market (10.3% per year).

High Growth Revenue: GGBR4's revenue (6.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: GGBR4's Return on Equity is forecast to be low in 3 years time (8.7%).


Next Steps

Past Performance

How has Gerdau performed over the past 5 years?

65.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: GGBR4 has high quality earnings.

Growing Profit Margin: GGBR4's current net profit margins (3.6%) are lower than last year (3.6%).


Past Earnings Growth Analysis

Earnings Trend: GGBR4 has become profitable over the past 5 years, growing earnings by 65.4% per year.

Accelerating Growth: GGBR4's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: GGBR4 had negative earnings growth (-4.5%) over the past year, making it difficult to compare to the Metals and Mining industry average (-10%).


Return on Equity

High ROE: GGBR4's Return on Equity (4.6%) is considered low.


Next Steps

Financial Health

How is Gerdau's financial position?


Financial Position Analysis

Short Term Liabilities: GGBR4's short term assets (R$22.1B) exceed its short term liabilities (R$9.2B).

Long Term Liabilities: GGBR4's short term assets (R$22.1B) do not cover its long term liabilities (R$22.8B).


Debt to Equity History and Analysis

Debt Level: GGBR4's debt to equity ratio (62%) is considered high.

Reducing Debt: GGBR4's debt to equity ratio has reduced from 76.7% to 62% over the past 5 years.

Debt Coverage: GGBR4's debt is not well covered by operating cash flow (18.7%).

Interest Coverage: GGBR4's interest payments on its debt are well covered by EBIT (4.3x coverage).


Balance Sheet


Next Steps

Dividend

What is Gerdau current dividend yield, its reliability and sustainability?

1.06%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: GGBR4's dividend (1.06%) isn’t notable compared to the bottom 25% of dividend payers in the BR market (1.12%).

High Dividend: GGBR4's dividend (1.06%) is low compared to the top 25% of dividend payers in the BR market (5.43%).


Stability and Growth of Payments

Stable Dividend: GGBR4's dividend payments have been volatile in the past 10 years.

Growing Dividend: GGBR4's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (18%), GGBR4's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: GGBR4's dividends in 3 years are forecast to be well covered by earnings (21.1% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

5.2yrs

Average management tenure


CEO

Gustavo Da Cunha (47 yo)

2.83yrs

Tenure

Mr. Gustavo Werneck Da Cunha has been the Chief Executive Officer at Gerdau S.A. since January 1, 2018 and serves as its Director. Mr. Werneck has been in Gerdau S.A. (“Gerdau”) for 13 years. In the last 5...


Leadership Team

NamePositionTenureCompensationOwnership
Gustavo Da Cunha
CEO & Director2.83yrsno datano data
Claudio Gerdau Johannpeter
Vice Chairman of the Board0.83yrno datano data
Harley Lorentz Scardoelli
Executive VP5.17yrsno datano data
Clemir Uhlein
Accounting Directorno datano datano data
Francisco Deppermann Fortes
VP of HR5.58yrsno datano data
Fabio de Pieri Spina
Legal Directorno datano datano data
Pedro Pinto
Head of Corporate Communicationno datano datano data
Paulo Ramos
Director of Marketingno datano datano data
Luiz Polacchini
Global Head Finance Shared Services6.83yrsno datano data
Chia Wang
President & CEO of North American Long Steel Operation2.58yrsno datano data
Mauro De Paula
Executive Officerno datano datano data
Cesar Da Rosa Peres
Executive Officerno datano datano data

5.2yrs

Average Tenure

57yo

Average Age

Experienced Management: GGBR4's management team is seasoned and experienced (5.2 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Gustavo Da Cunha
CEO & Director2.83yrsno datano data
Claudio Gerdau Johannpeter
Vice Chairman of the Board0.83yrno datano data
André Bier Gerdau Johannpeter
Vice President of Board of Directors2.83yrsno datano data
Fernando Fontes Iunes
Independent Director5.17yrsno datano data
Geraldo Toffanello
Member of Board of Auditors6.83yrsno datano data
Guilherme Chagas Johannpeter
President of Board of Directors0.83yrno datano data
Márcio Torres
Directorno datano datano data
Bolívar Charneski
Member of Board of Auditors9.83yrsno datano data
Richard Gerdau Johannpeter
Director5.83yrsno datano data
Aod Cunha Moraes
Directorno datano datano data
Carlos Cafareli
Member of Board of Auditors3.83yrsno datano data
Claudia Ramirez
Directorno datano datano data

4.5yrs

Average Tenure

54.5yo

Average Age

Experienced Board: GGBR4's board of directors are considered experienced (4.5 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Gerdau S.A.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Gerdau S.A.
  • Ticker: GGBR4
  • Exchange: BOVESPA
  • Founded: 1901
  • Industry: Steel
  • Sector: Materials
  • Market Cap: R$36.090b
  • Shares outstanding: 1.70b
  • Website: https://www2.gerdau.com

Number of Employees


Location

  • Gerdau S.A.
  • Av. Doutora Ruth Cardoso
  • 8,501 – 8° Floor
  • Sao Paulo
  • São Paulo
  • 05425-070
  • Brazil

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
GGBR4BOVESPA (Bolsa de Valores de Sao Paulo)YesPreferred SharesBRBRLDec 1992
XGGBBME (Bolsas y Mercados Espanoles)YesPreferred SharesESEURDec 1992
GDUBDB (Deutsche Boerse AG)YesPreferred SharesDEEURDec 1992
GGBR3BOVESPA (Bolsa de Valores de Sao Paulo)Common SharesBRBRLOct 1994
GGBNYSE (New York Stock Exchange)SPONS ADR EACH REP 1 PRF SHS NPVUSUSDMar 1999
GDUADB (Deutsche Boerse AG)SPONS ADR EACH REP 1 PRF SHS NPVDEEURMar 1999
GGB NBMV (Bolsa Mexicana de Valores)SPONS ADR EACH REP 1 PRF SHS NPVMXMXNMar 1999
0A0ZLSE (London Stock Exchange)SPONS ADR EACH REP 1 PRF SHS NPVGBEURMar 1999

Biography

Gerdau S.A. provides steel products and services in the United States and Canada. It operates through four segments: Brazil Operations, North America Operations, South America Operations, and Special Steel...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/11/25 18:09
End of Day Share Price2020/11/24 00:00
Earnings2020/09/30
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.