Gerdau S.A. (GGB) is one of the leading low-cost steel producing companies. Despite this, there were negative sentiments for Gerdau as the company posted weak fourth quarter results, having been hurt primarily by higher raw material costs.
Moreover, foreign currency fluctuation, cyclicality of the industry and stiff competition pose threats for the company. Anticipating a lack of positive catalysts in the quarters ahead, we downgrade Gerdau to an Underperform recommendation.
Our $12.00 target price is based on 9.2X 2011 earnings per ADR. The stocks also carries a Zacks #5 Rank (Strong Sell).
GERDAU SA ADR (GGB): Free Stock Analysis Report
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