Shares of Gerdau surged +6.4% to R$25.63 after Itaú BBA upgraded the stock from neutral to outperform and raised its end-2027 price target from R$29 to R$31 — a potential 21% upside from current levels. The upgrade, representing a R$2 increase in the target, came with a shift in outlook that Itaú BBA tied explicitly to a changing macro backdrop. The call arrived just days after Gerdau reported third-quarter earnings, giving the upgrade concrete financial grounding.
Three-Quarters of Profits Now Come From the U.S. The timing isn't coincidental. Gerdau posted adjusted EBITDA of R$3.8 billion in Q3 with a 20.2% margin — its highest since Q2 2023 — driven by North American operations that now account for 76% of consolidated EBITDA.
Itaú BBA's analysts highlighted that a weaker Brazilian real (sliding from R$5.11 to roughly R$5.40) boosts the dollar-denominated earnings Gerdau books in the U.S. when translated back to reais. That currency tailwind, combined with successive price increases for commercial bars, structural profiles, and rebar in the U.S. through Q3 and into Q4 , makes North America the engine of the bull case.
Data Centers and Renewables Are Filling the Order Book. Gerdau operated at 90% utilization for rolled steel in the U.S., reflecting robust demand from data centers, renewable energy projects, and semiconductor plant construction.
Management said its backlog exceeded 100 days — the highest since 2021. For shareholders, that backlog visibility means revenue is locked in for months, reducing the guesswork around near-term cash flows.
Brazil Remains the Weak Link. Management expects margin compression in Brazil in Q4 due to weaker seasonal demand, higher export exposure, and steel price pressure, while elevated inflation and high interest rates weigh on domestic consumption.
Brazilian utilization rates were just 64% for rolled steel — a stark contrast to the U.S. Itaú BBA acknowledged Brazil as the drag but argued American strength more than offsets it.
The Dividend and Buyback Signal Confidence. Gerdau declared R$0.34 per share in Q3 dividends , and its 2026 buyback program targets up to 56.4 million shares. With free cash flow jumping to R$1.4 billion from just R$233 million the prior quarter , the company has ample firepower to keep returning cash. Still, the open question is whether a steelmaker so reliant on one geography can sustain this premium — especially if U.S. construction cools or tariff dynamics shift.