Gerdau (NYSE:GGB) Shares Break Above 200 Day Moving Average - What's Next?

Key Points

• Gerdau shares broke above their 200-day moving average, reaching $5.19 and recently trading near $5.15, versus the 200-day average of $4.58.
• Analyst sentiment remains mixed: JPMorgan raised its target to $6.50, while several firms downgraded the stock. The consensus rating is “Hold” with an average price target of $5.57.
• Gerdau increased its quarterly dividend to $0.0448, implying an annualized yield of about 3.5%; however, company insiders sold roughly 147,407 shares worth $737,561 during the latest quarter.

Shares of Gerdau S.A. (NYSE:GGB - Get Free Report) passed above its 200-day moving average during trading on Monday. The stock has a 200-day moving average of $4.58 and traded as high as $5.19. Gerdau shares last traded at $5.1450, with a volume of 7,163,915 shares.

Analysts Set New Price Targets

GGB has been the topic of a number of research analyst reports. JPMorgan Chase & Co. increased their price target on Gerdau from $6.00 to $6.50 and gave the stock an "overweight" rating in a report on Friday, September 4th. HSBC downgraded shares of Gerdau from a "buy" rating to a "hold" rating in a research report on Thursday, August 20th. Bank of America lowered shares of 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. The Goldman Sachs Group downgraded shares of Gerdau to a "neutral" rating in a research report on Monday, August 24th. Finally, Itau BBA Securities downgraded shares of Gerdau from an "outperform" rating to a "market perform" rating in a research report on Monday, August 10th. One equities research analyst has rated the stock with a Strong Buy rating, two have assigned a Buy rating and six have issued a Hold rating to the company's stock. Based on data from MarketBeat, Gerdau has an average rating of "Hold" and a consensus price target of $5.57.

Gerdau Stock Up 0.5%

The company has a current ratio of 2.87, a quick ratio of 1.30 and a debt-to-equity ratio of 0.26. The stock's 50-day moving average price is $4.86 and its 200-day moving average price is $4.58. The company has a market cap of $10.10 billion, a P/E ratio of 22.37 and a beta of 1.48.

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, meeting analysts' consensus estimates of $0.15. Gerdau had a return on equity of 7.97% and a net margin of 3.37%. The business had revenue of $3.45 billion during the quarter, compared to analyst estimates of $3.41 billion. As a group, research analysts forecast that Gerdau S.A. will post 0.55 EPS for the current year.

Gerdau Increases Dividend

The company also recently disclosed a quarterly dividend, which was paid on Friday, September 18th. Shareholders of record on Friday, August 21st were paid a $0.0448 dividend. This represents a $0.18 dividend on an annualized basis and a yield of 3.5%. This is a boost from Gerdau's previous quarterly dividend of $0.0361. The ex-dividend date of this dividend was Friday, August 21st. Gerdau's payout ratio is 65.22%.

Insider Activity

In other news, Chairman Claudio Johannpeter sold 85,607 shares of the business's stock in a transaction that occurred on Wednesday, September 23rd. The stock was sold at an average price of $4.94, for a total transaction of $422,898.58. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available at this link. Also, CFO Rafael Japur sold 10,000 shares of Gerdau stock in a transaction on Thursday, August 6th. The shares were sold at an average price of $5.10, for a total transaction of $51,000.00. Following the completion of the sale, the chief financial officer directly owned 86,967 shares of the company's stock, valued at approximately $443,531.70. The trade was a 10.31% decrease in their position. The SEC filing for this sale provides additional information. Insiders sold a total of 147,407 shares of company stock worth $737,561 over the last quarter. 0.02% of the stock is currently owned by corporate insiders.

Institutional Inflows and Outflows

A number of large investors have recently made changes to their positions in the business. Greenspring Advisors LLC acquired a new stake in shares of Gerdau in the 2nd quarter worth about $47,000. SmartHarvest Portfolios LLC acquired a new position in Gerdau during the 1st quarter valued at about $43,000. Allspring Global Investments Holdings LLC acquired a new position in Gerdau during the 1st quarter valued at about $45,000. Bank of New York Mellon Corp bought a new stake in Gerdau during the 1st quarter worth approximately $46,000. Finally, EverSource Wealth Advisors LLC increased its holdings in Gerdau by 57.6% during the 1st quarter. EverSource Wealth Advisors LLC now owns 13,243 shares of the basic materials company's stock worth $48,000 after purchasing an additional 4,842 shares in the last quarter. 1.49% of the stock is owned by institutional investors.

About Gerdau

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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