Ashar Jawad
2 min read
In This Article:
Gerdau S.A. (NYSE:GGB) is among the 10 Most Undervalued Stocks to Buy for Under $5. Earlier this week, UBS upgraded the stock's rating from Neutral to Buy and also increased its share price target to $ 3.80 from $ 2.90 previously. The new price target represents a 26% upside potential from its current trading levels.
A steel worker in high-visibility gear standing in front of a vast array of steel products.
The revision follows the Trump administration’s decision to increase import tariffs on steel to 50%. Analysts at UBS view this as a significant development for Gerdau S.A. (NYSE:GGB), considering the company’s substantial operations in the U.S., which provide it a hedge against the current protectionist policies.
UBS analysts highlighted the tight demand and supply dynamics for steel in the US, due to higher import tariffs, which are expected to increase end-product spreads and improve producer margins. This has prompted analysts to increase their 2026 EBITDA estimates for Gerdau S.A. (NYSE:GGB) by 32% from their previous levels.
They also anticipate a reduction in capex from 2026 onwards, resulting in a significant expansion in free cash flow. With a forward price-earnings ratio of 8.15, Gerdau S.A. (NYSE:GGB) is one of the most undervalued stocks to buy for under $5.
While we acknowledge the potential of GGB as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
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Disclosure: None.
