GERDAU S.A.

GGBR4
End-of-day quote. End-of-day quote  - 11/23
22.05BRL +2.99%

Gerdau S.A. : The underlying trend is to the upside

Nicolas Aleksy
Contributor / Partner

Strategy published on : 11/19/2020 | 03:21

long trade
Live

Entry price : 20.97BRL
Target : 23.5BRL
Stop-loss : 19.5BRL
Potential : 12.06%

Gerdau S.A.'s shares display attractive technical aspects to anticipate a comeback of the underlying trend.
Investors have an opportunity to buy the stock and target the BRL 23.5.

Summary

● The company has strong fundamentals. More than 70% of listed companies have a lower mix of growth, profitability, debt and visibility criteria.

● The company has solid fundamentals for a short-term investment strategy.


Strengths

● As regards fundamentals, the enterprise value to sales ratio is at 1.13 for the current period. Therefore, the company is undervalued.

● Over the last 4 months, analysts have significantly revised upwards the company's estimated sales.

● Over the last seven days, analysts have been revising upwards their EPS estimates for the company.

● For the past twelve months, EPS forecast has been revised upwards.

● Within the weekly time frame the stock shows a bullish technical configuration above the support level at 14.71 BRL


Weaknesses

● The share is close to its long-term resistance in weekly data. Therefore, the potential should be limited. However, a further bullish movement when crossing this resistance will be a positive signal.

● Prospects from analysts covering the stock are not consistent. Such dispersed sales estimates confirm the poor visibility into the group's activity.

● The group usually releases earnings worse than estimated.

● The firm pays small or no dividend to shareholders. For that reason, it is not a yield company.

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