GGB - Gerdau Q1 Earnings: Upside Is Interesting, But There Are No Triggers

2025-04-30 06:00:36 ET

Summary

• Gerdau's revenue exceeded estimates, but net income disappointed for the 3rd consecutive quarter.
• Resilient EBITDA margin (13.8%), but Chinese competition puts pressure on operations in Brazil. High CapEx reduced FCF, while debt and leverage increased slightly.
• Attractive valuation (EV/EBITDA of 3.57x), but without clear triggers for appreciation.

Investment Thesis

I recommend holding Gerdau (GGB) shares after the release of Q1 2025 results. This article is a continuation of my introductory coverage article published on May 7, 2024, with the same recommendation....

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