Gerdau S.A. heads into the final day of April with the most lopsided call-side options positioning it has seen all year — a sharp reversal from a market that spent much of the quarter hedging against further pain.
The clearest signal this week is in options. Call demand has overwhelmed puts to a degree that is unusual even for a stock mid-rally. The put/call ratio dropped to 0.097 on April 29, below even its 52-week low of 0.014 and roughly a third of its 20-day average of 0.167. That reads as nearly 1.5 standard deviations below the recent mean — firmly in bullish-skew territory. The shift has been rapid: as recently as late March, the PCR was running above 0.23, near the top of the year's range. Options traders who were defensive a month ago have rotated decisively toward calls.
That rotation tracks the price action. GGB closed at $4.43 on April 29, up 29.5% over the past month and 2.3% on the week, though it gave back 1.8% on the day. The RSI-14 reading of 77 confirms the stock is technically extended. The rally has been broad-based and persistent, not a single-session spike, but a reading that far into overbought territory warrants attention from momentum traders watching for mean reversion.
Short positioning offers little friction for either side. Estimated short shares held around 6 million as of April 28 — down nearly 9% on the day but up 12% on the week, following a sharp jump from roughly 1.5 million in late March. The dramatic month-on-month increase (326%) reflects a reset from an unusually low base in mid-March rather than a crowded short thesis. Borrow costs are running at just 0.45% annualised, easing 14% over the week. Availability remains wide open — the lending pool is far from stressed. Days to cover is just over one day, per official FINRA data. There is no meaningful short-squeeze setup here; the borrow market is relaxed and short interest, while growing from that low base, remains modest relative to the share count.
The Street has been chasing the rally upward. UBS raised its target to $5.25 from $4.60 in a note filed April 29, maintaining its Buy rating. JP Morgan lifted its target to $5.50 from $5.00 on April 13, also holding Overweight. Both moves reflect the tailwind from a recovering Brazilian steel market and a weaker BRL providing export competitiveness. At $4.43, GGB trades at a P/E of 7.8x and EV/EBITDA of 4.3x — the latter has compressed by 0.37 turns over the past 30 days as the price ran ahead of consensus revisions. The EV/EBITDA compression signals that the market is paying less for each dollar of EBITDA than it was a month ago. The dividend score ranks in the 84th percentile, though the dividend history in this snapshot is stale (last declared in BRL in early 2022), so yield expectations should be cross-checked against current Bovespa-level disclosures. The 12-month forward yield is noted at 3.74%. Analyst return potential from current levels is modest at 7.8%, suggesting the Street's price targets have been closing in on the spot price rapidly.
On the ownership side, the notable move is BlackRock adding 127 million shares in the most recent reported period — a substantial build that brings the firm to 6.8% of shares outstanding. T. Rowe Price added 50.5 million shares in the same filing window, reaching 3.2%. Both updates carry recent reporting dates, which lends them more weight than the several major holders still showing year-end 2025 data. The controlling family vehicle Indac remains anchored at 35.6% — the free float picture is tight, which amplifies institutional moves at the margin. On the insider side, a divisional president sold 59,000 shares across two transactions in early April at prices between $4.00 and $4.21, for combined proceeds of roughly $241,000. The trade significance score is low and the notional is small relative to the position; it reads as routine portfolio management rather than a directional signal.
The next scheduled earnings event is August 4. With the stock technically overbought, short interest rebuilding from a low base, and analyst targets within reach, the stock's near-term story will hinge on whether the April earnings print — which showed a 4.6% single-day move — sustains the bullish narrative into the summer reporting cycle.
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