Gerdau (GGB) Up 25% as North American Steel Demand Lifts Earnings

Gerdau S.A. (NYSE:GGB) has rallied more than 25% over the past six months and added another 5% since its fiscal first-quarter 2026 earnings report. The gains trace to the company's North American steel operations, which have captured demand from non-residential construction and energy infrastructure projects.

The Brazilian steelmaker trades at a forward price-to-earnings ratio of about 8, a discount to the sector average. That gap reflects persistent concerns about Brazil's domestic economy, which still accounts for a meaningful share of revenue. The North American division has been narrowing that discount by posting stronger margins and faster growth than the Brazil segment.

Gerdau's U.S. and Canadian mills produce rebar and wire rod used in highway and bridge construction, as well as manufacturing plant projects. Federal infrastructure spending and reshoring of industrial capacity have supported demand in those product lines. The company has been upgrading its rolling capacity in the region to meet the order flow.

The risk is a slowdown in U.S. non-residential construction. If infrastructure spending fades or interest rates stay high enough to delay projects, the North American margin advantage could compress. For now, the division is the primary earnings driver.

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