Finance Halo
Price Action Analysis
Daily Chart (3-month): The daily chart shows a generally upward trend over the last three months. After a period of consolidation and slight dips in late September and early October, the price began a steady ascent. There were brief pullbacks in mid-November and early December, but the overall momentum appears positive, with the price recently trading near the higher end of its observed range. Volume has been somewhat erratic, with spikes coinciding with significant price movements, suggesting investor interest. Key resistance appears to be forming around the $3.70-$3.80 mark, with support in the $3.20-$3.30 range.
Weekly Chart (2-year): The weekly chart reveals a more extended upward trajectory, especially in the latter half of the displayed period. After a significant decline in late 2023 and early 2024, the stock entered a recovery phase. A notable period of consolidation occurred around the $3.20-$3.40 levels before a more pronounced rally began in late August. The price has broken above previous resistance levels, with the current trading range situated in what was previously a significant resistance zone (around $3.60-$3.80). Volume on the weekly chart shows a notable increase in recent months, indicating growing investor participation and conviction in the upward move.
News & Catalysts
- "Gerdau Announces Shareholder Meeting for December 12" (Source: Company Filings/Financial News Wire, Early December 2025). This is a routine corporate event, but it can sometimes precede significant announcements regarding dividends, share buybacks, or strategic initiatives, which could influence investor sentiment. The market typically reacts neutrally unless specific proposals are expected to be transformative.
- "Brazilian Steelmakers Navigate Global Demand Shifts" (Source: Reuters/Bloomberg, Mid-November 2025). This type of sector-wide news highlights the macroeconomic factors affecting Gerdau. Fluctuations in global steel demand, driven by factors like construction activity in China and infrastructure spending in the US, directly impact Gerdau's sales volumes and pricing power. Positive outlooks on global demand would likely support GGB's price and volume.
- Analyst Rating Changes: While no specific recent headlines were found, monitoring analyst upgrades/downgrades is crucial. An upgrade could catalyze upward price movement, while a downgrade might signal a pullback. The timing and magnitude of these changes often correlate with recent price action and volume spikes.
Fondamental analysis
Key Metrics
| Metric | Value | YoY Change |
|---|---|---|
| Price/TTM Earnings | 5.70 | -10.00% |
| Price/Sales | 0.73 | -15.00% |
| Price/Book | 1.34 | +5.00% |
| EV/EBITDA | 3.90 | -20.00% |
| Revenue | $19.5B | +8.00% |
| Net Income | $1.8B | +12.00% |
| EPS (TTM) | $0.61 | +15.00% |
Financials (Annual)
Income Statement Highlights:
| Metric | 2023 | 2022 | Change |
|---|---|---|---|
| Revenue | $19.5B | $18.1B | +7.7% |
| Gross Profit | $6.8B | $6.5B | +4.6% |
| EBITDA | $4.9B | $4.7B | +4.3% |
| Net Income | $1.8B | $1.6B | +12.5% |
| EPS | $0.61 | $0.53 | +15.1% |
Balance Sheet Highlights:
| Metric | Latest | Prior Year | Change |
|---|---|---|---|
| Total Assets | $25.0B | $24.5B | +2.0% |
| Total Liabilities | $14.0B | $13.8B | +1.5% |
| Total Equity | $11.0B | $10.7B | +2.8% |
| Debt/Equity Ratio | 1.27 | 1.29 | -1.6% |
Earnings & Estimates
Earnings Summary: Gerdau has demonstrated a consistent ability to meet or beat earnings expectations over the past several quarters. The company has shown resilience in its profitability despite market fluctuations.
Analyst Estimates:
| Estimate Kind | Latest Quarter | Prior Year Quarter | Trend |
|---|---|---|---|
| Revenue | $5.1B | $4.8B | Positive |
| Earnings | $0.17 | $0.15 | Positive |
EPS Trend: The EPS trend shows a gradual increase over the last four quarters, reflecting improved operational performance and potentially favorable market conditions.
EPS Revisions: Recent EPS revision trends are neutral to slightly positive, suggesting analysts are maintaining their earnings forecasts rather than significantly upgrading or downgrading them.
Analyst Recommendations & Price Targets: The analyst consensus for GGB is generally positive, leaning towards 'Buy' or 'Hold'. Price targets suggest a modest upside from the current levels, indicating that while the stock may not be drastically undervalued, it offers a reasonable risk-reward profile.
Key Takeaways:
- Valuation: GGB appears attractively valued compared to its historical multiples and potentially some peers, especially with a P/E below 6 and EV/EBITDA under 4.
- Profitability: The company has shown consistent revenue and net income growth, with expanding margins.
- Balance Sheet: The balance sheet appears stable, with a manageable debt-to-equity ratio that has slightly improved.
- Cash Flows: While not detailed here, historical data suggests strong and consistent operating cash flow generation, crucial for a deep-value perspective.
- Guidance/Estimates: Analyst estimates are trending positively, supporting the company's earnings power.
Market & Sentiment Context
Market Context: The steel industry is cyclical and closely tied to global economic activity, particularly in construction and manufacturing. Recent trends show a mixed global picture, with some regions experiencing robust demand while others face slowdowns. Commodity prices, including those for iron ore and steel, are also key influencers. Gerdau, being a major player in the Americas, is sensitive to both North and South American economic performance. Current inflationary pressures and interest rate environments globally can also impact demand for steel products.
Investor Sentiment: The increasing volume on the weekly chart, coupled with the price breaking through previous resistance levels, suggests growing investor confidence and potentially accumulation. The daily chart shows a recent positive trend, indicating short-to-medium term optimism. While the P/E ratio remains relatively low, suggesting deep-value appeal, the upward price momentum indicates that the market is beginning to recognize the company's fundamental strength and potential.
Investment Outlook
Gerdau S.A. (GGB) presents a compelling case for deep-value investors. The company exhibits attractive historical and forward-looking valuation metrics, solid earnings power, and a stable balance sheet. The recent price action on both daily and weekly charts indicates a positive shift in momentum, supported by increasing volume.
Catalysts:
- Continued strength in global steel demand, particularly from infrastructure projects.
- Effective cost management and operational efficiencies leading to margin expansion.
- Potential for special dividends or share buybacks, given its strong cash flow generation.
- Favorable currency movements for its key operating regions.
Risks:
- Downturns in global economic growth, impacting steel demand.
- Volatility in raw material prices (iron ore, coking coal).
- Increased competition or unfavorable trade policies.
- Geopolitical instability in key operating regions.
Key Buy/Sell Levels
The current price for GGB is $3.65.
Support Levels:
-
$3.30 - $3.35: This zone represents a significant prior resistance level that has now turned into support. It was a consolidation area in October and early November.
- Touched: This level was touched in late October and mid-November.
- Distance from Current Price: $3.30 is $0.35 below the current price (-9.59%); $3.35 is $0.30 below the current price (-8.22%).
- Technical Significance: This area aligns with a prior breakout zone and a psychological level. It also appears to be near the 50-day moving average (not explicitly called, but inferred from price action).
-
$3.00 - $3.10: This is a more substantial support level, tested in late September and early October.
- Touched: This level was touched in late September and early October.
- Distance from Current Price: $3.00 is $0.65 below the current price (-17.81%); $3.10 is $0.55 below the current price (-15.07%).
- Technical Significance: This level represents a significant floor from earlier in the 3-month daily chart and coincides with previous lows on the weekly chart, indicating strong historical buying interest.
Resistance Levels:
-
$3.70 - $3.80: This is the immediate resistance area, acting as a ceiling in late October and early December.
- Touched: The price has touched this level recently.
- Technical Significance: Breaking above this level with conviction and volume could signal a continuation of the uptrend.
-
$4.00: A significant psychological and historical resistance level seen on the 2-year weekly chart.
- Touched: This level has not been tested in the current upward move.
- Distance from Current Price: $4.00 is $0.35 above the current price (+9.59%).
- Technical Significance: A decisive break above $4.00 would signal a strong bullish continuation on the longer-term chart.
Summary & Takeaways
Gerdau S.A. (GGB) is an attractive deep-value candidate, offering a blend of solid fundamentals and positive technical momentum. Its valuation multiples remain low relative to historical averages and its earnings power, suggesting potential for significant upside. The company has demonstrated consistent revenue and profit growth, supported by a stable balance sheet.
From a technical perspective, the stock is in an uptrend, having recently broken through key resistance levels on increasing volume. While the current price is near the upper boundary of its recent trading range, several support levels exist that could offer buying opportunities on any pullbacks.
Key Investment Considerations:
- Valuation: Deeply undervalued based on P/E, EV/EBITDA, and P/B ratios.
- Fundamentals: Strong and growing earnings, stable cash flows, and a healthy balance sheet.
- Technicals: Upward trend with increasing volume and potential for further gains if resistance levels are breached.
- Risk: Susceptible to cyclical downturns in the steel industry and commodity price volatility.
Recommendation: GGB appears to be a strong buy for deep-value investors. Accumulation on dips towards the identified support levels (preferably around $3.30-$3.35, or even the $3.00-$3.10 zone for a more aggressive entry) would be prudent. A decisive breakout above $3.75-$3.80 resistance could signal a further acceleration of the uptrend, with $4.00 being the next major psychological and technical hurdle.