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Gerdau SA
(NYSE:GGB)
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Rating:62Neutral
Price Target:
$5.50
▲(14.35% Upside)
Action:Reiterated
Date:08/06/26
The score is driven primarily by stable-but-subdued fundamentals: strong revenue growth and manageable leverage are offset by materially weaker margins and low returns versus prior-cycle peaks. Technicals add support due to a clear uptrend, but overbought signals temper the outlook. Valuation is the key drag, with a high P/E and only a moderate dividend yield.
Positive Factors
Revenue Growth
Sustained TTM revenue growth of ~49.8% indicates expanding end-market demand and stronger volume/realized price dynamics. This scale improvement supports capacity utilization, underpins operating leverage and provides a base for continued investment in plants and regional expansion over the next 2–6 months.
Negative Factors
Profitability Compression
Margins and returns have materially downshifted versus prior cycles, with net margin around 2.0% and ROE ~2.5% TTM. Persistently compressed profitability limits internal capital generation, reduces cushion against raw material and energy cost swings, and constrains long‑term return on invested capital.
Read all positive and negative factors
Positive Factors
Negative Factors
Revenue Growth
Sustained TTM revenue growth of ~49.8% indicates expanding end-market demand and stronger volume/realized price dynamics. This scale improvement supports capacity utilization, underpins operating leverage and provides a base for continued investment in plants and regional expansion over the next 2–6 months.
Read all positive factors
Gerdau SA (GGB) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$8.75B
Dividend Yield2.69%
Average Volume (3M)16.43M
Price to Earnings (P/E)30.9
Beta (1Y)1.04
Revenue Growth8.98%
EPS Growth-21.39%
CountryUS
Employees30,000
SectorBasic Materials
Sector Strength58
IndustrySteel
Share Statistics
EPS (TTM)1.12
Shares Outstanding1,261,042,400
10 Day Avg. Volume16,510,801
30 Day Avg. Volume16,428,560
Financial Highlights & Ratios
PEG Ratio-0.43
Price to Book (P/B)0.76
Price to Sales (P/S)0.58
P/FCF Ratio35.70
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$5.85Price Target Upside21.62% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)0.54
Revenue Forecast (FY)$13.84B
Gerdau SA Business Overview & Revenue Model
Company Description
Gerdau S.A., together with its subsidiaries, operates as a steel producer company. It operates through Brazil Business, North America Business, and South America Business segments. The company offers rebars, bars, wires, thick plates, hot rolled c...
How the Company Makes Money
Gerdau makes money primarily by producing steel and selling steel products to customers across its operating regions. Its core revenue model is volume multiplied by realized selling prices for its steel products, with revenue driven by (1) shipmen...
Gerdau SA Earnings Call Summary
Earnings Call Date:Aug 04, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 26, 2026
Earnings Call Sentiment Positive
The call conveyed a broadly positive operational and financial tone driven by strong North American volume growth (7% YoY), a consolidated adjusted EBITDA of BRL 3.4 billion, a 45% QoQ rise in adjusted net income to BRL 1.5 billion, improved H1 cash generation (+BRL 2.3 billion YoY), low leverage (0.69x), and progress on strategic projects (Miguel Burnier ramp-up, recycling center, >50% self-generated energy). Notable near-term headwinds include pressure on Brazilian margins from high imports and structural issues at Ouro Branco, a one-off Midlothian maintenance cost (BRL 100–150m), and elevated freight/energy costs. Management emphasized financial discipline, potential modest CapEx reductions, and shareholder returns (dividends, 31% complete buyback). Overall, the positives (strong NA performance, robust EBITDA/net income, cash improvements, strategic project progress, balance sheet strength) outweigh the negatives, though Brazil remains a material area for remediation.Positive Updates
North America Volume and Margin Expansion
Shipments in North America grew 7% year-over-year; adjusted EBITDA in North America increased 15% quarter-over-quarter driven by resilient demand (renewable energy, data centers) and solid plant performance.
Negative Updates
Brazil Operations Under Pressure from Imports
Brazilian operations only posted a slight improvement; results remain pressured by high levels of imports year-to-date which continue to affect profitability. Antidumping investigations into long and flat steel products are pending with expected updates in H2 2026.
Read all updates
Q2-2026 Updates
Positive
Negative
North America Volume and Margin Expansion
Shipments in North America grew 7% year-over-year; adjusted EBITDA in North America increased 15% quarter-over-quarter driven by resilient demand (renewable energy, data centers) and solid plant performance.
Read all positive updates
Company Guidance
Management’s guidance painted a constructive near‑term picture: shipments rose (North America volumes +7% YoY) and North America adjusted EBITDA was up ~15% QoQ, helping consolidated adjusted EBITDA reach BRL 3.4 billion in Q2 (the best since Q3’23) and adjusted net income to BRL 1.5 billion (+45% QoQ); the company declared dividends of BRL 0.23/share (Gerdau S.A.) and BRL 0.11/share (Metalúrgica) and the S.A. buyback is 31% complete. Balance‑sheet and cash metrics: net debt ~BRL 8 billion with net debt/EBITDA 0.69x LTM (policy limit 1.5x, preference to stay <1x), Q2 free cash flow BRL 237 million and +BRL 2.3 billion FCF in 1H26 vs 1H25; working‑capital release expected in Q3–Q4. CapEx guidance is ~BRL 4.7 billion for the year (maintenance ~BRL 3 billion/yr) with potential total CapEx easing toward BRL 4.0–4.5 billion going forward and upside to shareholder returns if cash permits. Operationally, Miguel Burnier is slated to start producing ore in Q3 with full‑run benefits expected into 2027 (management cited project benefits in the BRL hundreds of millions to ~BRL 1 billion range and a broader project package of ~BRL 1.4–1.5 billion p.a. at full operation); Midlothian downtime drove a one‑time idleness impact of ~BRL 100–150 million and freight rose ~8.5% QoQ—recent U.S. price increases are not yet fully captured in the outlook, representing an upside risk.Gerdau SA Financial Statement Overview
Summary
Income Statement
56
Neutral
Balance Sheet
72
Positive
Cash Flow
60
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 69.54B | 69.86B | 67.03B | 68.92B | 82.41B | 78.35B |
| Gross Profit | 9.11B | 7.97B | 9.20B | 11.33B | 18.75B | 20.82B |
| EBITDA | 8.87B | 7.57B | 9.39B | 13.23B | 19.69B | 23.99B |
| Net Income | 2.24B | 1.39B | 4.57B | 7.50B | 11.43B | 15.49B |
Balance Sheet | ||||||
| Total Assets | 81.97B | 81.69B | 86.81B | 74.89B | 73.80B | 73.81B |
| Cash, Cash Equivalents and Short-Term Investments | 5.44B | 6.37B | 8.28B | 5.34B | 5.43B | 6.79B |
| Total Debt | 15.17B | 15.57B | 14.92B | 12.20B | 13.66B | 14.98B |
| Total Liabilities | 28.24B | 27.89B | 28.64B | 25.65B | 27.50B | 31.00B |
| Stockholders Equity | 53.54B | 53.59B | 57.95B | 49.06B | 46.12B | 42.60B |
Cash Flow | ||||||
| Free Cash Flow | 3.53B | 1.13B | 5.43B | 5.80B | 6.67B | 9.32B |
| Operating Cash Flow | 9.12B | 7.99B | 11.38B | 11.14B | 11.15B | 12.52B |
| Investing Cash Flow | -5.57B | -7.57B | -5.03B | -5.77B | -4.46B | -3.00B |
| Financing Cash Flow | -6.74B | -1.72B | -2.69B | -4.13B | -8.26B | -9.98B |
Gerdau SA Technical Analysis
Neutral
4.81
Price Trends
4.60
Positive
4.46
Positive
4.11
Positive
Market Momentum
0.07
Positive
47.87
Neutral
23.38
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GGB, the sentiment is Neutral. The current price of 4.81 is below the 20-day moving average (MA) of 4.88, above the 50-day MA of 4.60, and above the 200-day MA of 4.11, indicating a neutral trend. The MACD of 0.07 indicates Positive momentum. The RSI at 47.87 is Neutral, neither overbought nor oversold. The STOCH value of 23.38 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for GGB.
Gerdau SA Risk Analysis
Gerdau SA disclosed 40 risk factors in its most recent earnings report. Gerdau SA reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Gerdau SA Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $7.98B | 13.39 | 13.65% | 1.10% | 15.23% | 1535.96% | |
66 Neutral | $10.66B | 14.86 | 5.77% | 4.65% | -0.65% | 18.90% | |
62 Neutral | $8.75B | 30.87 | 2.53% | 2.65% | 8.98% | -21.39% | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
61 Neutral | $5.17B | 6.43 | 3.33% | ― | 7.95% | -38.27% | |
53 Neutral | $6.93B | -7.13 | -15.23% | ― | 4.03% | 52.63% | |
41 Neutral | $1.15B | -3.34 | -12.83% | ― | 2.16% | 20.46% |
* Basic Materials Sector Average
GGB
Gerdau SA
4.74
1.82
62.38%
CLF
Cleveland-Cliffs
11.90
1.32
12.48%
CMC
Commercial Metals Company
71.63
15.38
27.34%
SIM
Grupo Simec SA De CV
30.50
1.72
5.98%
SID
Companhia Siderúrgica Nacional
0.89
-0.43
-32.44%
TX
Ternium SA
53.81
22.76
73.28%
Gerdau SA Corporate Events
Gerdau Delivers Strong 2Q26 Results and Boosts Energy Self-Generation
Aug 5, 2026
On August 5, 2026, Gerdau reported strong second‑quarter 2026 results, highlighted by shipment growth in Brazil and North America, a 16% quarter‑on‑quarter increase in adjusted EBITDA to R$3.4 billion, and a 45% rise in adjusted ...
Gerdau Posts Stronger 2Q26 Results, Boosts Payouts and Energy Self-Sufficiency
Aug 4, 2026
Brazilian steel producer Gerdau S.A. reported improved results for the second quarter of 2026, with steel shipments rising 3% quarter-on-quarter to 2.9 million tonnes and net sales up 7% to R$17.9 billion. Adjusted EBITDA climbed 16% versus the pr...
Gerdau Announces Interim 2026 Dividends for Local Shares and ADRs
Aug 4, 2026
On August 4, 2026, Gerdau S.A. and Metalúrgica Gerdau S.A. approved interim dividend payments as an advance on the minimum dividend for the 2026 fiscal year, covering common, preferred and ADR shares. Record dates fall on August 19 for local ...
Gerdau Files Mid‑Year 2026 Interim Financials with U.S. SEC
Aug 4, 2026
On August 4, 2026, Gerdau S.A. filed a Form 6-K with the U.S. Securities and Exchange Commission, presenting unaudited condensed consolidated interim financial statements as of June 30, 2026. The filing provides U.S. investors with updated visibil...
Gerdau Completes R$154 Million Acquisition to Expand Renewable Energy Self-Production
Jul 21, 2026
On July 20, 2026, Gerdau S.A. announced it had completed the acquisition of the entire 23.03% equity stake in renewable power producer Dona Francisca Energética S.A. from Centrais Elétricas de Santa Catarina S.A. The deal followed satisf...
Gerdau Moves to Full Control of Dona Francisca Hydroelectric Asset to Boost Renewable Self-Generation
Jun 15, 2026
On June 15, 2026, Gerdau announced it had signed a binding share purchase agreement with Companhia Paranaense de Energia (COPEL) to acquire COPEL’s entire 23.03% equity stake in Dona Francisca Energética S.A. (DFESA) for an enterprise v...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.