GET DAILY SIGNALSGerdau (GGB) ADR Pulls Back Near $4.42 After Solid Q3 Results
Key Takeaways
- GGB shares traded near $4.42, roughly 7.5% lower than a month earlier, even after a well-received third-quarter 2026 earnings report.
- Third-quarter adjusted EBITDA rose 10% quarter over quarter to R$3.8 billion, with a 20.2% margin—the highest since the second quarter of 2023.
- North America generated more than three-quarters of EBITDA and a 27.7% margin, supported by demand from data centers, renewable energy, and non-residential construction.
- Brazil remained under pressure from elevated steel imports, oversupply, and high interest rates, posting a 10.7% EBITDA margin.
- Free cash flow jumped to R$1.4 billion, net debt/EBITDA fell to 0.58x, and both S&P and Fitch revised their outlooks to positive.
Where GGB Stands in the Market Right Now
Gerdau's American depositary receipts trade on the New York Stock Exchange under the ticker GGB, with the underlying shares also listed on Brazil's B3 exchange. Following a strong performance over the prior twelve months, the ADR has seen a modest pullback recently, sitting near $4.42 versus roughly $4.78 a month ago. The shares eased in the sessions right after the October 27, 2026 third-quarter release, as investors appeared cautious on Brazilian demand and valuation following the earlier advance rather than any disappointment in the actual results. In the broader steel and basic materials sector, views remain split, with North American pricing and demand holding firm while Brazil faces import competition and softer local activity.
Gerdau's Business Model and Position
Gerdau S.A. ranks among the world's top producers of long steel and the largest in the Americas. Based in São Paulo, Brazil, the company runs a diversified network across Brazil, North America, and South America, turning out rebar, structural beams, billets, wire rod, and special bar quality steel for construction, automotive, agriculture, energy, and industrial users. Vertical integration stands out in its approach, with iron ore from its own mining assets and scrap-based electric arc furnaces helping manage input costs. North America now accounts for the majority of consolidated profitability, which has lowered exposure to the more volatile Brazilian market. Investors track GGB for its leverage to U.S. infrastructure and reshoring trends, a disciplined balance sheet, and steady returns to shareholders via dividends and buybacks. I also checked this using Tickeron’s AI Screener to see how the stock compares to others in the industry.
What Drove Recent Moves in GGB
The third-quarter 2026 results served as the main catalyst for recent trading. Adjusted EBITDA reached R$3.8 billion with a 20.2% margin, while adjusted net income climbed to R$1.5 billion, or R$0.79 per share. North America again led the way, delivering EBITDA of R$2.9 billion and a 27.7% margin—the highest in four years—as stronger U.S. steel prices more than offset seasonally lower volumes. Management pointed to a solid order backlog linked to renewable energy and data-center projects. Brazil showed some gradual progress with a 10.7% margin, though imports, oversupply, and high interest rates continued to weigh on demand. South America EBITDA declined 22% quarter over quarter, mainly due to scheduled maintenance in Argentina.
Outside of earnings, free cash flow of R$1.4 billion represented a sixfold sequential improvement, and the company declared a R$0.34 per-share dividend payable in December. S&P Global Ratings and Fitch both shifted their outlooks to positive while keeping investment-grade ratings in place. On the strategic side, Gerdau started operations at its Pindamonhangaba recycling center, moved close to completing the Miguel Burnier iron ore project for a fourth-quarter launch, and advanced the Midlothian mill expansion in Texas. Brazil's re-elected administration is expected to maintain trade-defense measures, which management sees as helpful for domestic competitiveness. From what I see, these operational updates add meaningful context to the earnings picture.
Key Areas to Monitor Through 2026 and Into 2027
As the year winds down and 2027 approaches, several factors are likely to draw attention. In North America, realized steel prices, scrap costs, and demand momentum from non-residential construction, energy, and data centers will influence margins, with a planned Midlothian maintenance shutdown expected to create a short-term cost headwind. In Brazil, attention will center on steel import levels, progress with antidumping actions, and the path of interest rates alongside construction activity. The ramp-up of the Miguel Burnier mine and the Midlothian expansion should support 2027 results, and management has set an Investor Day for December 4, 2026 to outline its Brazil restructuring plan. Currency swings between the Brazilian real and U.S. dollar will also affect reported figures. Competitors such as Nucor (NUE) offer a useful read on North American long-steel pricing trends. I’m watching this closely as the data unfolds.
Using Tickeron Tools for Deeper Market Insight
In my own analysis, I frequently reference Tickeron’s AI Trading Bots to see how automated strategies are positioned across similar names in the sector. The platform’s Trending AI Robots section highlights bots with strong recent results across different approaches and risk levels, which helps put current conditions into perspective without replacing manual review.
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Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
GGB in downward trend: price dove below 50-day moving average on October 26, 2026
GGB moved below its 50-day moving average on October 26, 2026 date and that indicates a change from an upward trend to a downward trend. In 28 of 45 similar past instances, the stock price decreased further within the following month. The odds of a continued downward trend are 62%.
Technical Analysis (Indicators)
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on October 23, 2026. You may want to consider selling the stock, shorting the stock, or exploring put options on GGB as a result. In 52 of 90 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are 58%.
The Moving Average Convergence Divergence Histogram (MACD) for GGB turned negative on October 23, 2026. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 52 similar instances when the indicator turned negative. In 27 of the 52 cases the stock turned lower in the days that followed. This puts the odds of success at 52%.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where GGB declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 62%.
Bullish Trend Analysis
The Stochastic Oscillator demonstrated that the ticker has stayed in the oversold zone for 1 day, which means it's wise to expect a price bounce in the near future.
Following a +4.38% 3-day Advance, the price is estimated to grow further. Considering data from situations where GGB advanced for three days, in 204 of 274 cases, the price rose further within the following month. The odds of a continued upward trend are 74%.
GGB may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
The Aroon Indicator entered an Uptrend today. In 215 of 276 cases where GGB Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are 78%.
Fundamental Analysis (Ratings)
The Tickeron Valuation Rating of 9 (best 1 - 100 worst) indicates that the company is seriously undervalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (0.170) is normal, around the industry mean (2.190). P/E Ratio (4.043) is within average values for comparable stocks, (35.240). Projected Growth (PEG Ratio) (0.030) is also within normal values, averaging (0.339). Dividend Yield (0.036) settles around the average of (0.068) among similar stocks. P/S Ratio (0.729) is also within normal values, averaging (2.301).
The Tickeron Price Growth Rating for this company is 46 (best 1 - 100 worst), indicating steady price growth. GGB’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is 48 (best 1 - 100 worst), indicating well-balanced risk and returns. The average Profit vs. Risk Rating rating for the industry is 68, placing this stock slightly better than average.
The Tickeron SMR rating for this company is 84 (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron PE Growth Rating for this company is 94 (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
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General Information
a manufacturer of specialty steel products
Industry Steel
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