Gerdau (NYSE:GGB) Shares Break Above 200-Day Moving Average - Here's Why

Key Points

• Gerdau shares broke above their 200-day moving average, reaching $5.04 and last trading near $5.02, compared with a 200-day average of $4.50.
• Analyst sentiment remains cautious: the stock carries an overall “Hold” rating and a consensus price target of $5.57, despite JPMorgan raising its target to $6.50.
• Gerdau reported quarterly EPS in line with expectations at $0.15 and revenue above estimates at $3.45 billion. The company also increased its quarterly dividend to $0.0448, implying an annualized yield of about 3.6%.

Gerdau S.A. (NYSE:GGB - Get Free Report)'s share price passed above its two hundred day moving average during trading on Friday. The stock has a two hundred day moving average of $4.50 and traded as high as $5.04. Gerdau shares last traded at $5.0160, with a volume of 19,415,021 shares changing hands.

Wall Street Analyst Weigh In

GGB has been the topic of a number of recent analyst reports. HSBC lowered shares of Gerdau from a "buy" rating to a "hold" rating in a research note on Thursday, August 20th. Itau BBA Securities downgraded Gerdau from an "outperform" rating to a "market perform" rating in a research report on Monday, August 10th. Weiss Ratings raised Gerdau from a "hold (c)" rating to a "hold (c+)" rating in a research report on Wednesday, August 5th. JPMorgan Chase & Co. boosted their price target on Gerdau from $6.00 to $6.50 and gave the company an "overweight" rating in a research note on Friday, September 4th. Finally, Bank of America cut Gerdau from a "buy" rating to a "neutral" rating and set a $5.10 price objective for the company. in a research note on Thursday, August 20th. One research analyst has rated the stock with a Strong Buy rating, two have issued a Buy rating and six have given a Hold rating to the company. According to data from MarketBeat.com, the stock currently has an average rating of "Hold" and an average price target of $5.57.

Gerdau Price Performance

The firm has a 50-day simple moving average of $4.84 and a two-hundred day simple moving average of $4.50. The company has a market capitalization of $9.85 billion, a price-to-earnings ratio of 21.81 and a beta of 1.48. The company has a current ratio of 2.87, a quick ratio of 1.30 and a debt-to-equity ratio of 0.26.

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

Gerdau Increases Dividend

The business also recently declared a quarterly dividend, which was paid on Friday, September 18th. Shareholders of record on Friday, August 21st were issued a $0.0448 dividend. The ex-dividend date of this dividend was Friday, August 21st. This is a boost from Gerdau's previous quarterly dividend of $0.0361. This represents a $0.18 dividend on an annualized basis and a yield of 3.6%. Gerdau's dividend payout ratio is presently 65.22%.

Insiders Place Their Bets

In related news, Chairman Claudio Johannpeter sold 85,607 shares of the business's stock in a transaction on Wednesday, September 23rd. The shares were sold at an average price of $4.94, for a total value of $422,898.58. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available through this link. Also, EVP Rafael Lopes sold 51,800 shares of the business's stock in a transaction 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 completion of the transaction, the executive vice president owned 83,399 shares of the company's stock, valued at approximately $424,500.91. This represents a 38.31% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. In the last 90 days, insiders have sold 147,407 shares of company stock worth $737,561. Corporate insiders own 0.02% of the company's stock.

Institutional Trading of Gerdau

Hedge funds and other institutional investors have recently added to or reduced their stakes in the company. QRG Capital Management Inc. grew its holdings in Gerdau by 60.9% in the second quarter. QRG Capital Management Inc. now owns 48,434 shares of the basic materials company's stock valued at $196,000 after purchasing an additional 18,334 shares during the period. Sequoia Financial Advisors LLC raised its stake in shares of Gerdau by 8.3% during the 2nd quarter. Sequoia Financial Advisors LLC now owns 82,870 shares of the basic materials company's stock worth $335,000 after buying an additional 6,376 shares during the period. Tidal Investments LLC raised its stake in shares of Gerdau by 1.9% during the 2nd quarter. Tidal Investments LLC now owns 176,888 shares of the basic materials company's stock worth $715,000 after buying an additional 3,292 shares during the period. Engineers Gate Manager LP lifted 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 buying an additional 3,890,093 shares in the last quarter. Finally, Integrated Wealth Concepts LLC lifted its position in shares of Gerdau by 12.7% during the 2nd quarter. Integrated Wealth Concepts LLC now owns 136,038 shares of the basic materials company's stock valued at $550,000 after buying an additional 15,356 shares in the last quarter. Institutional investors and hedge funds own 1.49% of the company's stock.

Gerdau Company Profile

Gerdau SA is a Brazilian steel producer and one of the major suppliers of long steel in the Americas. The company manufactures products including rebar, wire rod, structural shapes, merchant bars and other steel products used in construction, infrastructure, industrial manufacturing and agricultural equipment.

Gerdau also produces special steel for the automotive, machinery and other industrial sectors, as well as flat steel products through its operations in Brazil. Its business includes steel recycling, with a significant portion of its production based on ferrous scrap, and the company operates a network of steel mills, fabrication facilities and distribution centers.

Founded in Brazil in 1901, Gerdau serves customers across Brazil, North America and South America.

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