Gerdau Heads Into Results With Clean Short Book

Gerdau S.A. reports Q3 2026 results on October 26 with one of the cleanest short books in the Brazilian steel sector, but the stock's persistent drift lower has raised a different set of questions for investors heading into the print.

The lending market tells an unambiguous story: there is essentially no short pressure on GGBR4. Borrow availability is at its maximum reading of 9,999%, meaning the pool of lendable shares is vastly larger than any demand to borrow them. The ORTEX short score sits at 24.9 out of 100, ranking in the 2nd percentile of the broader universe on short-seller interest, while the days-to-cover rank is at the 100th percentile, reflecting how quickly any hypothetical short position could be unwound. This is not a stock where the bear case is being expressed through the lending market. Cost-to-borrow data is stale, last recorded at 0.18% in late June, but the direction of travel over the past year has been sharply lower, from above 3.5% in early March to near zero by mid-year.

The price action, however, is less reassuring. GGBR4 has slipped about 1.7% over the past month to BRL 25.22, and a recent peer note placed it down roughly 18% year-to-date. Closest domestic peer GOAU4 fell in tandem on the week, down about 1.0%, but US steel names moved in the opposite direction: STLD gained 0.4%, NUE edged up 0.7%, and RS rose 1.1%. That divergence puts a spotlight on Brazil-specific headwinds, domestic demand softness and commodity pricing pressure, as the primary drag rather than any global sector rotation. Analyst consensus data is stale, last updated in March 2026, so it carries limited weight, but the mean target of BRL 24.50 sat modestly below the current price even then, consistent with a market that sees the stock as roughly fairly valued rather than deeply discounted.

The valuation picture offers some context for the bull case. GGBR4 trades at 8.7 times trailing earnings and 0.84 times book, both multiples that have compressed over the past 30 days. The earnings yield ranks in the 85th percentile of the universe, and forward EPS momentum over 12 months ranks in the 85th percentile as well. The controlling shareholder, Indac, holds 35.8% and made no changes to that position through October 20. Among financial holders, Bank of America added roughly 64 million shares, a significant move reported through September. On the insider side, the aggregate net in the 90-day window registered zero, with a pattern of small director sells punctuated by a board-level purchase of 165,000 shares at BRL 24.06 in June.

The Q3 print will test whether Gerdau's earnings quality can justify a re-rating toward its peers at a moment when the rest of the steel complex is at least holding flat, and whether the domestic Brazilian demand environment is stabilising or continuing to erode margins.