GGB
Gerdau S.A.
$4.75
Other Commodity Producers
80%
FCF at Commodity Price Scenarios
Mild
·
Conviction
Fair Value
Trading 4.3% below fair value
You pay
$4.75
Bear
$2.36
Fair
$4.96
Bull
$8.27
Bear
$2.36
-50.2%
FCF −30% × 8x
Fair
$4.96
+4.5%
Current FCF × 10x
Bull
$8.27
+74.1%
FCF +30% × 12x
Key Value Driver
Commodity price outlook and production volume
Implied Market Multiple
9.8x
Summary
Our base-case estimate uses FCF at Commodity Price Scenarios. We then blend that result with the average analyst price target of $5.25 from 10 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $4.96 per share.
Warnings
Demand trends (construction, electric vehicles, food production) matter more than supply headlines. Focus on who's buying the commodity and why.
Mines and reserves eventually run out. Standard models undercount this risk — the company must keep finding or buying new resources just to maintain its value.
Financial statements were converted from BRL into USD using USDBRL at 0.1993 USD per BRL.
Key Risks
- AISC vs. cash cost distinction: always use AISC for breakeven analysis
- Single-asset companies carry significantly higher risk — widen scenario range
- Mine permitting takes 10-20 years — growth optionality often priced in optimistically