Summary
- Gerdau S.A. is downgraded to HOLD due to increased valuation, macro volatility, and tariff-driven risks.
- NA operations drive recent EBITDA growth, but Brazilian margins are pressured by imports, and over 75% of CapEx remains Brazil-focused.
- GGB’s buybacks have supported share price, but yield is unattractive, and upside is now limited to less than 15%.
- I set a $4/share fair value, recommend entry is lower than…
Summary
- Gerdau S.A. is downgraded to HOLD due to increased valuation, macro volatility, and tariff-driven risks.
- NA operations drive recent EBITDA growth, but Brazilian margins are pressured by imports, and over 75% of CapEx remains Brazil-focused.
- GGB’s buybacks have supported share price, but yield is unattractive, and upside is now limited to less than 15%.
- I set a $4/share fair value, recommend entry is lower than before, and see peers as preferable alternatives.
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In my last article on Gerdau S.A. (GGB), I gave the company a positive, bullish rating. The company has performed well, with a return of close to double digits in about a year. Well, but not market-beating nor exceptional. There are indications that the
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