Gerdau Q2 2026: North America Holds, Brazil Import Relief Still a Promise

What happened

Gerdau’s Q2 2026 earnings call reinforced the two-speed reality: North America again delivered the bulk of EBITDA, supported by intact Section 232 tariffs and a favorable rebar antidumping final ruling that keeps imports contained. Brazil’s domestic shipments inched higher as import penetration dipped to 19% from 4Q25’s 21%, but average realized prices remain under pressure and the mix still leans toward lower-margin exports. Management flagged that key antidumping cases against Chinese HRC and wire rod are on track for definitive decisions by year-end, though actual price recovery will lag any ruling. Capex continued to step down as planned, and free cash flow improved sequentially, allowing for modest share buybacks under the existing authorization. The call offered no major surprises, leaving the investment case largely unchanged: a North American earnings stabilizer waiting for Brazil’s policy-driven margin recovery to materialize.

Implication

Investors should continue to monitor Brazil’s monthly import data; a sustained drop below 18% penetration would support adding to positions. The conclusion of Brazil’s AD cases by end-2026 could be a positive catalyst, but actual margin benefits are likely a 2027 event. North America provides a solid floor, but any unexpected weakening of Section 232 would quickly undermine the thesis. The risk-reward at current prices remains balanced, with the bull case still dependent on trade-defense execution rather than demand recovery. We see no reason to deviate from the $3.70 attractive entry and $5.80 trim targets until Brazil shows definitive margin expansion.

Thesis delta

The Q2 call confirms the master report’s WAIT thesis: North America remains the buffer, and Brazil is slowly improving but not yet out of the woods. The only incremental positive is that Brazil’s trade cases are progressing on schedule, slightly lifting the probability of a 2027 recovery. No shift in our base-case value estimate or conviction level.