Gerdau Flattened As Covid-19 Pushes Brazil's Long Steel Recovery Out At Least A Year

This had been shaping up as a good year for Gerdau (GGB), with good underlying evidence of growing steel demand on improving vehicle production in Brazil, increasing non-residential construction investment, and recovering industrial and consumer markets. Then Covid-19 swept the globe, and now Brazil’s looking at a year of GDP contraction, and probably not much GDP growth until late 2021 or 2022. On top of that, the U.S. non-residential market doesn’t look all that healthy to me over the next few years.

I do believe Gerdau is one of the better emerging market steel companies, but the headwinds in Brazil, the U.S., and the rest of LatAm are real. That makes Gerdau a riskier call in the short term, but I also do think the current share price underestimates the company’s long-term potential.

Read the full article:
Gerdau Flattened As Covid-19 Pushes Brazil's Long Steel Recovery Out At Least A Year