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Gerdau S.A. (NYSE:GGB ) Q3 2023 Earnings Conference Call November 7, 2023 10:00 AM ET Company Participants Renata Oliva Battiferro - Head of Investor Relations Gustavo Werneck - Chief Executive Officer Rafael Japur - Chief Financial Officer Conference Call Participants Edgard Pinto de Souza - Itaú BBA Leonardo Correa - BTG Pactual Lucas Laghi - XP Gabriel Simoes - Goldman Sachs Renata Oliva Battiferro Good afternoon, everyone, and welcome to Investor Relations and our Presentation for the Third Quarter of 2023.

Gerdau, a Brazilian steel giant, has faced challenges in 2023 due to a significant slowdown in domestic steel demand and uncertainties driven by China's economy. Despite these challenges, Gerdau has managed its finances well, maintaining a healthy balance sheet with a strong focus on capital management and a comfortable debt structure. While the company's long-term outlook remains attractive, its stock valuation has risen compared to previous years, making it less compelling for short-term investors.

Gerdau is well-positioned to benefit from increasing global steel demand and potential supply problems in the USA. The company has a strong balance sheet and shows an excellent ability to generate cash flows significantly exceeding the cost of capital. The management team has skin in the game and manages the company efficiently.

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Investors may keep a tab on stocks like GGB, CEQP and TSQ, with higher dividend yields compared to the industry.

Here is how Gerdau (GGB) and PPG Industries (PPG) have performed compared to their sector so far this year.

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Gerdau (GGB) made it through our 'Fast-Paced Momentum at a Bargain' screen and could be a great choice for investors looking for stocks that have gained strong momentum recently but are still trading at reasonable prices.

Gerdau (GGB) has been upgraded to a Zacks Rank #2 (Buy), reflecting growing optimism about the company's earnings prospects. This might drive the stock higher in the near term.

"Value ranking looks at the price of a stock relative to intrinsic firm value. Graham Value Stocks match the criteria Benjamin Graham followed." — YCharts Value Screener. 67 June value large caps and Graham formula-derived results reflect established value stock detection criteria. Of those, 54 met the dogcatcher-ideal of dividends from $1K invested exceeding single-share stock prices. Representing eight of eleven Morningstar Sectors, all 54 ideal value picks pay regular dividends. Broker-target top-ten net gains ranged 34.55%-81.13%, topped by SBSW and PDM, as of 6/8/23.