Gerdau S.A. (GGB) - What Are Brokerages Thinking About This Stock?

Key Points

• Analyst sentiment is mixed: Nine firms give Gerdau an average “Hold” rating—five holds and four buys—with an average 12-month price target of $5.65.
• Gerdau reported quarterly EPS of $0.15, below the $0.18 consensus estimate, and revenue of $3.61 billion versus expectations of $3.64 billion.
• The company raised its quarterly dividend from $0.0448 to $0.0637 per share, equivalent to an annualized yield of about 5.5% at the reported share price.

Gerdau S.A. (NYSE:GGB - Get Free Report) has been given an average recommendation of "Hold" by the nine ratings firms that are presently covering the stock, MarketBeat.com reports. Five analysts have rated the stock with a hold recommendation and four have assigned a buy recommendation to the company. The average 1 year price objective among brokerages that have updated their coverage on the stock in the last year is $5.65.

GGB has been the topic of several recent analyst reports. Bank of America lowered Gerdau from a "buy" rating to a "neutral" rating and set a $5.10 price target on the stock. in a research note on Thursday, August 20th. JPMorgan Chase & Co. upped their price objective on Gerdau from $6.00 to $6.50 and gave the stock an "overweight" rating in a research report on Friday, September 4th. Weiss Ratings raised Gerdau from a "hold (c+)" rating to a "buy (b-)" rating in a research note on Monday, October 12th. Scotiabank cut Gerdau from a "strong-buy" rating to a "hold" rating in a research report on Thursday, November 5th. Finally, HSBC cut Gerdau from a "buy" rating to a "hold" rating in a research report on Thursday, August 20th.

Gerdau Stock Performance

Shares of NYSE:GGB opened at $4.59 on Thursday. Gerdau has a 1 year low of $3.14 and a 1 year high of $5.48. The stock has a market capitalization of $9.02 billion, a price-to-earnings ratio of 16.41 and a beta of 1.55. The company has a debt-to-equity ratio of 0.26, a current ratio of 2.87 and a quick ratio of 1.30. The company's 50 day simple moving average is $4.91 and its 200 day simple moving average is $4.48.

Gerdau (NYSE:GGB - Get Free Report) last released its earnings results on Tuesday, October 27th. The basic materials company reported $0.15 earnings per share for the quarter, missing the consensus estimate of $0.18 by ($0.03). The business had revenue of $3.61 billion for the quarter, compared to the consensus estimate of $3.64 billion. Gerdau had a return on equity of 8.90% and a net margin of 4.06%. As a group, research analysts predict that Gerdau will post 0.55 EPS for the current fiscal year.

Gerdau Increases Dividend

The business also recently declared a quarterly dividend, which will be paid on Tuesday, December 22nd. Stockholders of record on Thursday, November 12th will be paid a $0.0637 dividend. This represents a $0.25 dividend on an annualized basis and a dividend yield of 5.5%. The ex-dividend date is Thursday, November 12th. This is an increase from Gerdau's previous quarterly dividend of $0.0448. Gerdau's dividend payout ratio is 53.57%.

Insider Buying and Selling

In related news, Chairman Claudio Johannpeter sold 85,607 shares of Gerdau stock in a transaction that occurred on Wednesday, September 23rd. The shares were sold at an average price of $4.94, for a total transaction of $422,898.58. The sale was disclosed in a document filed with the SEC, which is available through the SEC website. Also, EVP Rafael Lopes sold 51,800 shares of Gerdau stock in a transaction that occurred on Thursday, September 17th. The shares were sold at an average price of $5.09, for a total transaction of $263,662.00. Following the sale, the executive vice president directly owned 83,399 shares in the company, valued at $424,500.91. This trade represents a 38.31% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Company insiders own 0.02% of the company's stock.

Institutional Trading of Gerdau

A number of hedge funds have recently added to or reduced their stakes in the stock. Ninety One UK Ltd bought a new stake in shares of Gerdau during the third quarter worth $145,390,000. Donald Smith & CO. Inc. bought a new position in shares of Gerdau in the 2nd quarter valued at $70,663,000. Bank of America Corp DE boosted its holdings in shares of Gerdau by 11,393.6% during the 1st quarter. Bank of America Corp DE now owns 13,222,623 shares of the basic materials company's stock valued at $47,734,000 after acquiring an additional 13,107,580 shares in the last quarter. Ninety One North America Inc. acquired a new stake in shares of Gerdau during the 3rd quarter valued at $38,760,000. Finally, Renaissance Technologies LLC boosted its holdings in shares of Gerdau by 76.1% during the 1st quarter. Renaissance Technologies LLC now owns 10,936,524 shares of the basic materials company's stock valued at $39,481,000 after acquiring an additional 4,725,200 shares in the last quarter. Institutional investors and hedge funds own 1.49% of the company's stock.

About Gerdau

Gerdau is a Brazilian steel producer with roots dating to 1901, when João Gerdau established a nail factory in Porto Alegre. The company has since grown into a major producer of long steel products and a supplier of special steel. Its products serve construction, manufacturing, automotive, agricultural and other industrial markets. Gerdau makes items such as reinforcing steel, wire rod, structural shapes and specialty steel, and also has iron ore mining operations in Brazil. Its steelmaking relies substantially on recycling scrap metal.

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