Market Overview - Despite markets hovering near all-time highs, there is a shift from exuberance to cautious optimism, influenced by weak U.S. employment numbers and the potential economic impact of a federal government shutdown [1] - The market has not seen a 10% correction in over six months, leading investors to brace for a potential drawdown instead of a year-end rally [2] Value Stocks - Investors sitting on significant unrealized gains may consider reallocating to value stocks to minimize losses and generate income through dividends [2] - Five value stocks with a market cap of $3 billion or higher and a Benzinga Edge Value score of at least 90 are highlighted for portfolio protection in volatile environments [3] Sasol Ltd. - Sasol Ltd. has a Benzinga Edge Value Score of 99.66, with a market cap of $3.94 billion, trading at 10 times earnings, a P/B value of 0.4, and a P/S ratio of 0.27, indicating it is undervalued compared to U.S. and emerging market peers [4] - The stock has shown volatility but has evidence of upward momentum, with key technical levels to watch for a potential breakout [6] Gerdau SA - Gerdau has a Benzinga Edge Value Score of 97.67, with a market cap of $7 billion, trading at 8 times forward earnings, a P/B value of 0.70, and a P/S ratio of 0.37, along with a 3.27% dividend [7] - The stock has been trending higher since a Golden Cross in August, currently over 10% above its 50-day SMA, indicating bullish momentum [9] Ecopetrol SA - Ecopetrol has a Benzinga Edge Value Score of 97.47, with a market cap of $19 billion and annual sales exceeding $30 billion, showing a nearly 20% increase year-to-date [10] - The stock's fundamentals and technical trends are favorable, with a P/E ratio of 6.55 and a P/S ratio of 0.64, and bullish momentum is building [12] Seaboard Corp. - Seaboard has a Benzinga Edge Value Score of 94.03, with a market cap of $3.5 billion and annual sales over $9 billion, trading at 9 times earnings, a P/S ratio of 0.36, and a P/B ratio of 0.71 [13] - Recent signals indicate a revival in bullish momentum, with a significant rally taking the share price above the 50-day SMA [15] Fluor Corp. - Fluor has a Benzinga Edge Value Score of 91.46, with a market cap of $7 billion and annual sales exceeding $16 billion, trading at just 2 times earnings and a P/S ratio of 0.47 [16] - The stock has seen a 15% increase in the last three months, breaking above its 50- and 200-day SMAs, indicating a potential momentum reversal [18]

Financial Data and Key Metrics Changes - The company reported an EBITDA of BRL 2.7 billion for Q3 2025, which is a 7% increase quarter on quarter [6] - Free cash flow generated during the quarter was BRL 1 billion, converting 37% of EBITDA into cash, reversing previous cash consumption trends [7] - The net debt/EBITDA ratio improved to 0.81 times due to cash generation in Q3 [7] - Capital expenditures totaled BRL 1.7 billion, with a 22% reduction in CapEx guidance for 2026 compared to 2025 [8] Business Line Data and Key Metrics Changes - North America segment accounted for 65% of consolidated EBITDA, with over a 10% increase in total shipments compared to previous periods [4][5] - The South American segment showed recovery, which offset declines in Brazil, where the local market was heavily impacted by imported steel [6] Market Data and Key Metrics Changes - In North America, steel demand remains stable with healthy order backlogs, while Brazil's market is affected by over 6 million tons of imported steel, representing 29% of domestic sales [5][10] - The import penetration rate in Brazil continues to be a concern, necessitating protective measures for the local steel industry [5] Company Strategy and Development Direction - The company emphasizes internationalization and geographic diversification as strategic differentiators [5] - The sustainable mining project in Miguel Burnier is nearing completion, with operations expected to start in early 2026 [5] - The company is focusing on internal operating efficiency and cost management initiatives in response to market challenges [11] Management's Comments on Operating Environment and Future Outlook - Management expressed a positive outlook for North American steel demand driven by sectors like solar power and infrastructure, while the Brazilian market outlook remains uncertain [10][11] - There is cautious optimism regarding trade defense measures being adopted by the Brazilian government [11] - The company plans to enhance competitiveness through operational adjustments and potential consolidation of production routes if necessary [46][48] Other Important Information - The company approved a dividend distribution of BRL 0.28 per share at Gerdau S.A. and BRL 0.19 per share at Metallurgica Gerdau [8] - Share buybacks have reached 88% of the 2025 program, returning BRL 902 million to shareholders [9] Q&A Session Summary Question: What strategies are needed to improve the challenging scenario in Brazil? - Management indicated that further competitiveness measures have been exhausted, and trade defense is crucial for survival [28][30] Question: What is the outlook for U.S. prices and market dynamics? - Management noted that the metal spread has reached a level with limited room for further increases, and demand remains strong [33][34] Question: What is the impact of anti-dumping measures in the U.S.? - Management is monitoring the situation, noting that while rebar accounts for a small portion of the product mix, it could affect competition dynamics [41][42] Question: How will the company approach capital allocation in light of strong cash generation? - The focus will be on share buybacks over dividends, with a robust cash position allowing for strategic investments [43] Question: What are the implications of potential tariff renegotiations with Canada and Mexico? - Management believes that any agreements would optimize operations and sales across borders, enhancing profitability [80]

Financial Performance - Adjusted EBITDA reached R$27 billion[12] - Net income grew to R$11 billion, a 26% increase compared to 2Q25[12] - Free cash flow was R$10 billion, primarily due to higher working capital release[12] - Dividends declared for Gerdau S A were approximately R$555 million (R$028/share) and for Metalúrgica S A were approximately R$188 million (R$019/share)[12] - Share buyback program executed 88%, with approximately R$902 million invested, representing 29% of outstanding shares[12] Operational Highlights - Steel shipments reached 30 million tonnes, with YoY growth, including a 10% increase in North America[5] - North America achieved its highest-ever share in consolidated EBITDA at 65%, compared to 61% in 2Q25[8] - The Miguel Burnier Mining project is 90% complete and in the pre-operational phase, with start-up expected in 4Q25[10] Market Dynamics - Steel import penetration in Brazil remains high at 25% for the first nine months of the year[6] - CAPEX guidance for 2026 is R$47 billion, a 22% decrease compared to the 2025 estimate[12]

Group 1 - The event is Gerdau's Investor Day, welcoming attendees and highlighting the presence of familiar faces [1] - The agenda includes a presentation by the CEO, followed by a discussion on CapEx and financial management by the CFO [2] - For the first time, Gerdau Brazil Officer will present, concluding with a presentation from the leader of North America operations [3]

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Gerdau Investor Day Summary Company Overview - **Company**: Gerdau (NYSE:GGB) - **Event**: 2025 Investor Day - **Date**: October 01, 2025 Key Points Industry Context - The steel industry is facing challenges from high levels of imports, particularly from China, which is perceived as unfair competition due to subsidies [12][13] - Brazil is experiencing a significant deficit in engineering talent, with a projection of a shortage of 1,000,000 engineers by 2030 [10] - The Brazilian steel market is currently dealing with record levels of steel imports, which have reached 6.3% of total consumption, impacting profitability [60] Financial Management and Capital Allocation - Gerdau announced a reduction in CapEx disbursement by 22% for 2026, totaling BRL 4.7 billion, with BRL 2.9 billion allocated for maintenance and BRL 1.8 billion for competitive edge [21][19] - The company has maintained a strong financial position with a net debt to EBITDA ratio of 1.5x, indicating low leverage and financial health [40] - Gerdau has consistently returned more than 30% of net income to shareholders, with 75% of free cash flow returned through dividends and share buybacks [42][43] Operational Highlights - Gerdau is focusing on three main projects for the next three years: expansion in Midlothian, Texas, a new recycling center in Pindamonhangaba, and investments in mining operations [22][24][66] - The mining project is expected to ramp up by early next year, with an investment of BRL 3.6 billion, providing a significant competitive advantage [66][72] - The company is also investing in self-generation of electricity to reduce costs, which currently account for 4% of production costs in Brazil [30][33] Market Trends and Demand - The Brazilian market is expected to see moderate growth aligned with GDP, with specific segments like civil construction showing resilience despite high-interest rates [53][54] - Demand for steel in the automotive sector remains strong, although there are concerns about the inflow of imports affecting growth [56][59] - Gerdau is adapting to tariffs imposed on steel imports, which have led to a decline in imports and increased domestic prices, benefiting profitability [86][90] Strategic Initiatives - Gerdau is implementing a vertical integration strategy to secure its supply chain, particularly in iron ore, which is crucial for maintaining competitive production costs [64][66] - The company is enhancing its product portfolio, particularly in flat steel, to cater to high-demand sectors like oil and gas [74] - Gerdau is focusing on optimizing its mini-mill operations to improve scrap recovery and reduce dependency on external ore sources [80][81] Conclusion - Gerdau is positioning itself to navigate the challenges in the steel industry through strategic investments, operational efficiencies, and a strong focus on financial discipline, while also addressing the need for talent development in Brazil [11][10][15]

CAPEX and Investments - Gerdau expects to invest R$6 billion in 2025 and R$47 billion in 2026, focusing on maintenance, coking plants, blast furnaces, and competitiveness[13] - Approximately 45% of the total estimated CAPEX for 2026 is allocated to three main projects: Midlothian Expansion, Scrap Processing in Pindamonhangaba, and Miguel Burnier Mining[18] - The Miguel Burnier sustainable mining platform has a CAPEX of R$36 billion between 2023 and 2026 and a potential EBITDA gain of approximately R$11 billion per year[99] Financial Management and Liquidity - Gerdau's average debt term is 72 years, with a gross debt of R$181 billion and cash reserves of R$90 billion, resulting in a net debt of R$91 billion and a net debt/EBITDA ratio of 085x[37] - The company has strong liquidity in US dollars, with 59% of its cash held in USD[40, 41] - Approximately 75% of free cash flow generated from 1Q18 to 2Q25 was allocated to shareholders through dividends and buybacks, with shareholder remuneration totaling R$174 billion and buybacks at R$33 billion[59, 60] Brazil Operations - Gerdau's Brazil operations have a crude steel capacity of approximately 78 million tons per year and a rolling capacity of approximately 82 million tons per year[76] - The company anticipates moderate growth prospects in Brazil for the segments in which it operates, including automotive (+14%), industry, agriculture, and other (+17%), and civil construction (+05%) in 2026[80] - Gerdau is investing in a new hot coil rolling capacity in Brazil, expecting a total available capacity of 1080kt/year in 4Q25 and a potential EBITDA of R$400 million per year[93, 98] North America Operations - Gerdau has re-balanced its operational footprint in North America to minimize shipments between countries and has captured additional business from import declines due to tariffs[149] - The company has increased SBQ new sales quoting in the US by 60%, indicating new local investment activity[149] - Gerdau is well-positioned in high-growth end-markets in North America, such as renewable energy and data centers, and is increasing capacity at its Midlothian mill with a R$12 billion investment and a potential EBITDA of R$275 million per year[159, 166, 172]

Group 1 - Gerdau S.A. is scheduled to release its Q3 2025 earnings on October 30, 2025, with Wall Street projecting adjusted earnings per share of $0.57 and revenue of approximately $3.37 billion [1] - In Q2 2025, Gerdau reported revenue of $3.13 billion, missing estimates by $60.68 million, and adjusted earnings of $0.08 per share, below the expected $0.10 [2] - The Brazilian market faced challenges due to excessive steel imports, with an import penetration rate of 23.4%, impacting Gerdau's domestic operations [2] - Despite challenges in Brazil, Gerdau's North American operations achieved the highest all-time share in results, contributing 61% to EBITDA [3] - Gerdau's Q2 net income was approximately $161.22 million, reflecting a 14% increase from Q1 2025 [3] - The company is concerned about a reduction in production pace in Brazilian operations due to ongoing capital expenditure (CapEx) projects [3] - Gerdau anticipates a reduction in global CapEx disbursement starting in 2026, which may affect future investments in Brazil [3] Group 2 - The majority of analysts rate Gerdau S.A. as a Buy, with an average price target of $4, indicating an upside potential of nearly 27.33% from current levels [4] - Gerdau operates as a steel producer with segments in Brazil, North America, South America, and Special Steel [5]

Brazilian steelmaker Gerdau isn’t ruling out resuming plans to build a $600 million special steel project in Mexico depending on how US trade talks evolve https://t.co/CDMeoRrZiW ...

Group 1 - The investment thesis of Brazilian steelmaker Gerdau (NYSE: GGB) highlights two significant high-risk factors: the cyclical nature of the steel market and its exposure to the Brazilian market, which constitutes one-third of its EBITDA [1] Group 2 - The analyst focuses on undercovered stocks primarily in Brazil and Latin America, occasionally covering global large caps, indicating a niche investment strategy [2] - The analyst's work is featured on platforms like TipRanks and TheStreet, suggesting a broad reach in investment analysis [2] Group 3 - There is no disclosed stock or derivative position in any mentioned companies, indicating an unbiased perspective in the analysis [3] - The article expresses personal opinions and is not influenced by compensation from companies mentioned, reinforcing the independence of the analysis [3]