Gerdau S.A. (NYSE:GGB) Given Consensus Recommendation of "Hold" by Brokerages

Key Points

• Analysts have a consensus “Hold” rating on Gerdau, with six holds, two buys and one strong buy. The average 12-month price target is $5.575, modestly above the reported $5.04 share price.
• Recent analyst actions were mixed, including downgrades from Goldman Sachs, Itau BBA and HSBC, while JPMorgan raised its target price to $6.50 and maintained an overweight rating.
• Gerdau reported quarterly earnings of $0.15 per share, in line with estimates, and revenue of $3.45 billion. The company also increased its quarterly dividend to $0.0448 per share, representing a 3.6% annualized yield.

Gerdau S.A. (NYSE:GGB - Get Free Report) has received a consensus recommendation of "Hold" from the nine ratings firms that are presently covering the firm, Marketbeat.com reports. Six research analysts have rated the stock with a hold recommendation, two have assigned a buy recommendation and one has given a strong buy recommendation to the company. The average 12 month price target among analysts that have updated their coverage on the stock in the last year is $5.5750.

A number of analysts have recently weighed in on GGB shares. The Goldman Sachs Group downgraded shares of Gerdau to a "neutral" rating in a research report on Monday, August 24th. Weiss Ratings raised shares of Gerdau from a "hold (c)" rating to a "hold (c+)" rating in a research report on Wednesday, August 5th. Itau BBA Securities downgraded Gerdau from an "outperform" rating to a "market perform" rating in a research note on Monday, August 10th. JPMorgan Chase & Co. increased their target price on Gerdau from $6.00 to $6.50 and gave the stock an "overweight" rating in a report on Friday, September 4th. Finally, HSBC downgraded Gerdau from a "buy" rating to a "hold" rating in a report on Thursday, August 20th.

Insiders Place Their Bets

In related news, CFO Rafael Japur sold 10,000 shares of the stock in a transaction dated Thursday, August 6th. The shares were sold at an average price of $5.10, for a total transaction of $51,000.00. Following the sale, the chief financial officer owned 86,967 shares in the company, valued at $443,531.70. This represents a 10.31% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available through this hyperlink. Also, EVP Rafael Lopes sold 51,800 shares of the firm's stock in a transaction dated Thursday, September 17th. The stock was sold at an average price of $5.09, for a total transaction of $263,662.00. Following the completion of the transaction, the executive vice president directly owned 83,399 shares in the company, valued at $424,500.91. This represents a 38.31% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. 0.02% of the stock is currently owned by corporate insiders.

Institutional Trading of Gerdau

A number of institutional investors and hedge funds have recently made changes to their positions in the stock. Donald Smith & CO. Inc. acquired a new position in shares of Gerdau during the second quarter valued at approximately $70,663,000. Bank of America Corp DE lifted its position in Gerdau by 11,393.6% in the first quarter. Bank of America Corp DE now owns 13,222,623 shares of the basic materials company's stock worth $47,734,000 after purchasing an additional 13,107,580 shares during the period. Renaissance Technologies LLC boosted its stake in 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 purchasing an additional 4,725,200 shares in the last quarter. Assenagon Asset Management S.A. acquired a new position in shares of Gerdau during the 2nd quarter valued at $16,291,000. Finally, Engineers Gate Manager LP increased its position in shares of Gerdau by 124.7% during the 2nd quarter. Engineers Gate Manager LP now owns 7,010,275 shares of the basic materials company's stock valued at $28,322,000 after purchasing an additional 3,890,093 shares during the period. 1.49% of the stock is currently owned by institutional investors and hedge funds.

Gerdau Stock Up 0.7%

Shares of NYSE GGB opened at $5.04 on Wednesday. The company has a debt-to-equity ratio of 0.26, a quick ratio of 1.30 and a current ratio of 2.87. Gerdau has a 1 year low of $3.05 and a 1 year high of $5.18. The stock's 50-day simple moving average is $4.83 and its 200-day simple moving average is $4.43. The firm has a market cap of $9.88 billion, a price-to-earnings ratio of 21.89 and a beta of 1.49.

Gerdau (NYSE:GGB - Get Free Report) last issued its quarterly earnings data on Tuesday, August 4th. The basic materials company reported $0.15 earnings per share for the quarter, meeting analysts' consensus estimates of $0.15. Gerdau had a return on equity of 7.97% and a net margin of 3.37%.The firm had revenue of $3.45 billion during the quarter, compared to analyst estimates of $3.41 billion. As a group, equities analysts anticipate that Gerdau will post 0.55 earnings per share for the current fiscal year.

Gerdau Increases Dividend

The firm also recently announced a quarterly dividend, which was paid on Friday, September 18th. Shareholders of record on Friday, August 21st were paid a dividend of $0.0448 per share. The ex-dividend date was Friday, August 21st. This is a positive change from Gerdau's previous quarterly dividend of $0.04. This represents a $0.18 annualized dividend and a yield of 3.6%. Gerdau's payout ratio is presently 65.22%.

Gerdau Company Profile

Gerdau SA is a Brazil-based steel producer whose American depositary shares trade on the New York Stock Exchange under the symbol GGB. The company manufactures and sells steel products for construction, industrial, agricultural, automotive and other end markets.

Its product portfolio includes long steel products such as rebar, wire rod, structural sections and merchant bars, as well as specialty steel and selected flat steel products. Gerdau also operates steel mills and scrap-processing facilities, using recycled ferrous scrap as an important raw material, and has activities connected with iron ore and other steelmaking inputs.

Founded in 1901, Gerdau has expanded from its Brazilian origins into one of the major steel producers in the Americas.

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