Gerdau (NYSE:GGB) Stock Crosses Above Two Hundred Day Moving Average - What's Next?

Key Points

• Gerdau shares moved above their 200-day moving average, trading as high as $4.28 and last around $4.2550, which may signal improving near-term momentum.
• Analyst sentiment remains positive overall, with several firms raising targets or upgrading the stock; the consensus rating is “Moderate Buy” and the average price target is $5.12.
• Recent fundamentals were mixed: the company missed Q1 earnings and revenue estimates, but it increased its quarterly dividend to $0.0361 per share, boosting the annualized yield to about 3.4%.

Shares of Gerdau S.A. (NYSE:GGB - Get Free Report) crossed above its 200-day moving average during trading on Monday . The stock has a 200-day moving average of $4.11 and traded as high as $4.28. Gerdau shares last traded at $4.2550, with a volume of 15,769,496 shares traded.

Analyst Ratings Changes

GGB has been the subject of a number of research analyst reports. JPMorgan Chase & Co. upped their price target on shares of Gerdau from $5.00 to $5.50 and gave the stock an "overweight" rating in a research note on Monday, April 13th. Weiss Ratings reissued a "hold (c)" rating on shares of Gerdau in a report on Friday, March 27th. UBS Group restated a "buy" rating and issued a $5.25 target price (up from $4.60) on shares of Gerdau in a research report on Wednesday, April 29th. Itau BBA Securities raised Gerdau from a "market perform" rating to an "outperform" rating and set a $4.60 price target for the company in a research note on Wednesday, April 1st. Finally, Scotiabank raised Gerdau from a "hold" rating to a "strong-buy" rating in a research note on Thursday, March 26th. One research analyst has rated the stock with a Strong Buy rating, three have given a Buy rating and two have issued a Hold rating to the stock. According to MarketBeat.com, Gerdau presently has an average rating of "Moderate Buy" and a consensus price target of $5.12.

Gerdau Price Performance

The company has a debt-to-equity ratio of 0.26, a quick ratio of 1.29 and a current ratio of 2.76. The company's 50 day moving average price is $4.55 and its 200-day moving average price is $4.11. The company has a market cap of $8.51 billion, a price-to-earnings ratio of 26.60 and a beta of 1.48.

Gerdau (NYSE:GGB - Get Free Report) last released its earnings results on Tuesday, April 28th. The basic materials company reported $0.10 EPS for the quarter, missing the consensus estimate of $0.15 by ($0.05). The business had revenue of $3.22 billion for the quarter, compared to analyst estimates of $3.36 billion. Gerdau had a net margin of 2.40% and a return on equity of 6.76%. On average, equities research analysts forecast that Gerdau S.A. will post 0.55 earnings per share for the current fiscal year.

Gerdau Increases Dividend

The business also recently announced a quarterly dividend, which was paid on Tuesday, June 16th. Stockholders of record on Friday, May 15th were issued a dividend of $0.0361 per share. This is a positive change from Gerdau's previous quarterly dividend of $0.02. This represents a $0.14 annualized dividend and a dividend yield of 3.4%. The ex-dividend date of this dividend was Friday, May 15th. Gerdau's dividend payout ratio (DPR) is currently 75.00%.

Insider Activity at Gerdau

In related news, insider Chia Yuan Wang sold 76,700 shares of Gerdau stock in a transaction dated Tuesday, April 28th. The stock was sold at an average price of $4.49, for a total value of $344,383.00. Following the transaction, the insider owned 92,195 shares of the company's stock, valued at approximately $413,955.55. This trade represents a 45.41% decrease in their position. The sale was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. Also, CEO Cunha Gustavo Werneck Da sold 432,854 shares of Gerdau stock in a transaction dated Friday, May 8th. The stock was sold at an average price of $4.87, for a total value of $2,107,998.98. Following the completion of the transaction, the chief executive officer directly owned 432,854 shares in the company, valued at $2,107,998.98. This represents a 50.00% decrease in their position. The SEC filing for this sale provides additional information. Insiders sold 794,184 shares of company stock worth $3,697,276 in the last quarter. 0.02% of the stock is owned by company insiders.

Institutional Investors Weigh In On Gerdau

Large investors have recently made changes to their positions in the company. Bank of America Corp DE lifted its holdings in shares of 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 valued at $47,734,000 after purchasing an additional 13,107,580 shares in the last quarter. Amundi grew its holdings in shares of Gerdau by 4.6% during the first quarter. Amundi now owns 1,421,830 shares of the basic materials company's stock valued at $5,133,000 after buying an additional 62,607 shares in the last quarter. EverSource Wealth Advisors LLC raised its position in Gerdau by 57.6% during the first quarter. EverSource Wealth Advisors LLC now owns 13,243 shares of the basic materials company's stock valued at $48,000 after buying an additional 4,842 shares during the period. Renaissance Technologies LLC raised its position in Gerdau by 76.1% during the first quarter. Renaissance Technologies LLC now owns 10,936,524 shares of the basic materials company's stock valued at $39,481,000 after buying an additional 4,725,200 shares during the period. Finally, Caxton Associates LLP purchased a new stake in Gerdau in the 1st quarter worth about $272,000. Institutional investors and hedge funds own 1.49% of the company's stock.

Gerdau Company Profile

Gerdau SA is a Brazilian-based steel producer engaged in the manufacture and distribution of long steel products for the construction, industrial and agricultural sectors. Established in 1901, the company operates an integrated network of electric-arc furnaces and rolling mills, producing reinforcement bars, wire rod, merchant bars and structural shapes. Gerdau's product portfolio also includes specialty long steel, high-yield reinforcement, rail, beams and steel coils, as well as value-added processing services such as cutting, bending and coating.

The company has expanded its footprint beyond Brazil, with significant operations in North America, South America and a presence in select European markets.

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