Gerdau (NYSE:GGB) Shares Down 4.1% on Disappointing Earnings

Gerdau S.A. (NYSE:GGB)’s stock price fell 4.1% during trading on Wednesday following a weaker than expected earnings announcement. The company traded as low as $4.49 and last traded at $4.46. 1,301,824 shares traded hands during mid-day trading, a decline of 92% from the average session volume of 17,069,439 shares. The stock had previously closed at $4.65.

The basic materials company reported $0.15 EPS for the quarter, missing the consensus estimate of $0.17 by ($0.02). The firm had revenue of $3.61 billion for the quarter, compared to the consensus estimate of $3.64 billion.

Gerdau Increases Dividend

The firm also recently disclosed a quarterly dividend, which was paid on Friday, September 18th. Investors of record on Friday, August 21st were issued a $0.0448 dividend. 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 4.1%. The ex-dividend date was Friday, August 21st. Gerdau’s dividend payout ratio is currently 53.57%.

Analysts Set New Price Targets

Several equities analysts have weighed in on GGB shares. JPMorgan Chase & Co. raised their target price on Gerdau from $6.00 to $6.50 and gave the company an “overweight” rating in a report on Friday, September 4th. Itau BBA Securities downgraded Gerdau from an “outperform” rating to a “market perform” rating in a research note on Monday, August 10th. The Goldman Sachs Group downgraded Gerdau to a “neutral” rating in a research note on Monday, August 24th. Wall Street Zen raised Gerdau to a “strong-buy” rating in a report on Saturday, October 17th. Finally, Bank of America downgraded Gerdau from a “buy” rating to a “neutral” rating and set a $5.10 price objective on the stock. in a research note on Thursday, August 20th. One research analyst has rated the stock with a Strong Buy rating, three have given a Buy rating and five have given a Hold rating to the stock. Based on data from MarketBeat.com, Gerdau currently has a consensus rating of “Moderate Buy” and an average price target of $5.57.

Insider Buying and Selling

In other Gerdau news, EVP Rafael Lopes sold 51,800 shares of the firm’s stock in a transaction that occurred on Thursday, September 17th. The stock was sold at an average price of $5.09, for a total value of $263,662.00. Following the sale, the executive vice president owned 83,399 shares of the company’s stock, valued at $424,500.91. This trade represents a 38.31% decrease in their position. The transaction was disclosed in a filing with the SEC, which is available through this link. Also, Chairman Claudio Johannpeter sold 85,607 shares of Gerdau stock in a transaction that occurred on Wednesday, September 23rd. The stock was sold at an average price of $4.94, for a total value of $422,898.58. The disclosure for this sale is available in the SEC filing. In the last 90 days, insiders sold 147,407 shares of company stock valued at $737,561. Insiders own 0.02% of the company’s stock.

Institutional Investors Weigh In On Gerdau

Several hedge funds have recently modified their holdings of GGB. Greenspring Advisors LLC acquired a new stake in shares of Gerdau in the second quarter worth $47,000. Allspring Global Investments Holdings LLC acquired a new position in Gerdau during the 1st quarter valued at $45,000. Bank of New York Mellon Corp bought a new stake in Gerdau in the 1st quarter valued at $46,000. EverSource Wealth Advisors LLC boosted its holdings in Gerdau by 57.6% in the 1st quarter. EverSource Wealth Advisors LLC now owns 13,243 shares of the basic materials company’s stock valued at $48,000 after purchasing an additional 4,842 shares during the period. Finally, J. Safra Sarasin Holding AG bought a new stake in Gerdau in the 1st quarter valued at $52,000. 1.49% of the stock is owned by institutional investors.

Gerdau Stock Performance

The company has a market capitalization of $8.69 billion, a price-to-earnings ratio of 15.80 and a beta of 1.48. The firm’s 50-day simple moving average is $4.89 and its 200-day simple moving average is $4.45.

About Gerdau

Gerdau SA is a Brazil-based steel producer with operations across the Americas. The company manufactures and sells steel products for the construction, industrial, automotive, agricultural and infrastructure markets.

Its product portfolio includes long steel products such as rebar, wire rod, merchant bars and structural shapes, as well as special steel used in automotive and industrial applications. Gerdau also produces flat steel and semi-finished products, including billets and slabs, and operates steel mills, scrap-processing facilities and related distribution networks.

Founded in 1901, Gerdau has grown from a regional Brazilian steelmaker into an international producer serving customers in Brazil, North America and other parts of Latin America.