The strong North America performance and sequential EBITDA growth are positive, but Brazil's revenue decline and elevated import penetration are headwinds. Monitor the 2Q26 outlook for margin recovery in Brazil and the start-up of the Miguel Burnier mining project in 2H26, which could provide a catalyst. The buyback program and dividend provide downside support.
Price Chart
Executive Summary
Gerdau reported 1Q26 earnings with consolidated Adjusted EBITDA of R$3.0 billion, up 25% sequentially, driven by strong North America results (EBITDA +22.9% QoQ to R$2.25 billion). However, Brazil segment net sales fell 12.7% QoQ to R$6.27 billion amid import pressure and seasonality, and consolidated net sales declined 2% QoQ to R$16.7 billion. The company announced a new share buyback program at Metalúrgica Gerdau and declared dividends of R$0.18/share for Gerdau S.A.
Key Facts
- Consolidated Adjusted EBITDA of R$3.0 billion in 1Q26, up 25% from R$2.4 billion in 4Q25
- North America segment EBITDA of R$2.25 billion, up 22.9% QoQ, with margin expanding to 24.1% from 21.1%
- Brazil segment net sales of R$6.27 billion, down 12.7% QoQ, with EBITDA margin of 9.2% vs 7.1% in 4Q25
- Consolidated net sales of R$16.7 billion, down 2% from R$17.0 billion in 4Q25
- Adjusted net income of R$1.0 billion, up 51% from R$0.66 billion in 4Q25
- Free cash flow of R$16 million in 1Q26
- Leverage at 0.74x Net Debt/EBITDA, down from 0.76x in 4Q25
- Dividend of R$0.18 per share declared for Gerdau S.A., payable June 9, 2026
- New share buyback program at Metalúrgica Gerdau for up to 10 million preferred shares (GOAU4)
- Steel import penetration in Brazil reached 27% in 1Q26, up 2 p.p. from 4Q25
Financial Impact
Adjusted EBITDA of R$3.0 billion, net sales of R$16.7 billion, adjusted net income of R$1.0 billion
Risk Factors
- Continued high steel import penetration in Brazil pressuring domestic pricing and volumes
- Potential changes to Section 232 tariffs and USMCA review in July 2026 could impact North America operations
- Interest rate-sensitive sectors in Brazil (automotive, agribusiness) may face demand weakness
- Execution risk on major capex projects (Miguel Burnier, Midlothian expansion)
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 5 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 6-K Filing (Primary) | 0001104659-26-049841 |
| Document: tm2612822d3_6k.htm | 0001104659-26-049841 |
| Document: 0001104659-26-049841-index-headers.html | 0001104659-26-049841 |
| Document: 0001104659-26-049841-index.html | 0001104659-26-049841 |
| Document: 0001104659-26-049841.txt | 0001104659-26-049841 |
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Aug 14, 2026 7w ago | Insider Cluster | $4.74 $4.89 | ▲ +3.16% | ▲ +5.16% | $4.81 (+1.48%) |
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