Gerdau SA (GGB) Downgraded by Zacks Investment Research to “Hold”

Zacks Investment Research lowered shares of Gerdau SA (NYSE:GGB) from a buy rating to a hold rating in a research note published on Wednesday.

According to Zacks, “Year to date, Gerdau's American Depository Receipts (ADR) have outperformed the industry. We believe that the company's product portfolio, manufacturing techniques and international diversity will help it grow over the long term. Also, its strategy of disposing loss-making assets/businesses will enable it to focus on the profitable ones. Going forward, any investment by the government in infrastructure improvements will boost steel demand in Brazil, thereby creating favorable conditions for the company. However, it is exposed to risks arising from higher raw material costs, foreign currency fluctuations, huge debt levels and cyclical nature of the industry. In second-quarter 2017, the company's adjusted net income declined 19.1% year over year due to 10.6% fall in revenues, forex woes and higher income tax expenses. Also, the stock is currently overvalued compared with the industry.”

A number of other brokerages have also recently issued reports on GGB. BidaskClub cut Gerdau SA from a buy rating to a hold rating in a report on Monday, July 24th. Scotiabank upgraded Gerdau SA from an underperform rating to a sector perform rating in a report on Friday, June 9th. One research analyst has rated the stock with a sell rating and four have issued a hold rating to the company. The company presently has an average rating of Hold and a consensus target price of $4.00.

Shares of Gerdau SA (GGB) traded up 0.137% on Wednesday, reaching $3.655. The company’s stock had a trading volume of 4,602,083 shares. The stock’s market capitalization is $6.25 billion. The company has a 50 day moving average of $3.42 and a 200 day moving average of $3.37. Gerdau SA has a 1-year low of $2.47 and a 1-year high of $4.39.

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The business also recently announced a quarterly dividend, which will be paid on Monday, September 11th. Investors of record on Thursday, August 24th will be issued a $0.005 dividend. This represents a $0.02 dividend on an annualized basis and a dividend yield of 0.55%. The ex-dividend date is Tuesday, August 22nd.

Institutional investors have recently modified their holdings of the company. Fairpointe Capital LLC boosted its position in shares of Gerdau SA by 2.4% in the second quarter. Fairpointe Capital LLC now owns 22,079,702 shares of the basic materials company’s stock worth $67,344,000 after buying an additional 525,065 shares during the last quarter. Vanguard Group Inc. boosted its position in shares of Gerdau SA by 9.2% in the second quarter. Vanguard Group Inc. now owns 11,418,488 shares of the basic materials company’s stock worth $34,826,000 after buying an additional 958,540 shares during the last quarter. BT Investment Management Ltd bought a new position in shares of Gerdau SA during the second quarter worth about $32,817,000. Banco BTG Pactual S.A. bought a new position in shares of Gerdau SA during the first quarter worth about $27,600,000. Finally, JPMorgan Chase & Co. boosted its position in shares of Gerdau SA by 18.1% in the second quarter. JPMorgan Chase & Co. now owns 6,863,955 shares of the basic materials company’s stock worth $20,934,000 after buying an additional 1,052,535 shares during the last quarter. Institutional investors and hedge funds own 5.04% of the company’s stock.

About Gerdau SA

Gerdau SA (Gerdau) is a manufacturer of long steel in the North and South America. The Company is engaged in the production and commercialization of steel products in general, through its mills located in Argentina, Brazil, Canada, Chile, Colombia, Spain, the United States, Guatemala, India, Mexico, Peru, the Dominican Republic, Uruguay and Venezuela.