Gerdau S.A. (NYSE:GGB) was downgraded by Zacks Investment Research from a “buy” rating to a “hold” rating in a research note issued on Wednesday.

According to Zacks, “Year to date, Gerdau's American Depository Receipts (ADR) have outperformed the industry. We believe that the company's product portfolio, manufacturing techniques and international diversity will help it grow over the long term. Also, its strategy of disposing loss-making assets/businesses will enable it to focus on the profitable ones. Going forward, any investment by the government in infrastructure improvements will boost steel demand in Brazil, thereby creating favorable conditions for the company. However, it is exposed to risks arising from higher raw material costs, foreign currency fluctuations, huge debt levels and cyclical nature of the industry. In second-quarter 2017, the company's adjusted net income declined 19.1% year over year due to 10.6% fall in revenues, forex woes and higher income tax expenses. Also, the stock is currently overvalued compared with the industry.”

Other equities research analysts have also recently issued reports about the stock. BidaskClub cut shares of Gerdau from a “buy” rating to a “hold” rating in a report on Monday, July 24th. Scotiabank raised shares of Gerdau from an “underperform” rating to a “sector perform” rating in a report on Friday, June 9th. One analyst has rated the stock with a sell rating, four have assigned a hold rating and one has issued a buy rating to the company’s stock. The stock presently has a consensus rating of “Hold” and an average target price of $3.25.

Shares of Gerdau (NYSE:GGB) traded up 2.05% during midday trading on Wednesday, reaching $3.49. The company’s stock had a trading volume of 3,006,626 shares. The company has a 50 day moving average of $3.35 and a 200-day moving average of $3.38. The stock’s market capitalization is $5.96 billion. Gerdau has a 52 week low of $2.47 and a 52 week high of $4.39.

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Hedge funds and other institutional investors have recently modified their holdings of the company. BT Investment Management Ltd bought a new position in shares of Gerdau during the second quarter valued at $32,817,000. Banco BTG Pactual S.A. bought a new position in shares of Gerdau during the first quarter valued at $27,600,000. Horseman Capital Management Ltd bought a new position in shares of Gerdau during the first quarter valued at $13,830,000. Bank of America Corp DE raised its position in shares of Gerdau by 118.9% in the first quarter. Bank of America Corp DE now owns 5,409,654 shares of the basic materials company’s stock valued at $18,663,000 after buying an additional 2,938,567 shares during the last quarter. Finally, Morgan Stanley raised its position in shares of Gerdau by 416.0% in the first quarter. Morgan Stanley now owns 3,420,226 shares of the basic materials company’s stock valued at $11,800,000 after buying an additional 2,757,360 shares during the last quarter. Institutional investors own 5.04% of the company’s stock.

About Gerdau

Gerdau SA (Gerdau) is a manufacturer of long steel in the North and South America. The Company is engaged in the production and commercialization of steel products in general, through its mills located in Argentina, Brazil, Canada, Chile, Colombia, Spain, the United States, Guatemala, India, Mexico, Peru, the Dominican Republic, Uruguay and Venezuela.

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