During 1Q 09, Gerdau S.A.'s (Gerdau) revenues beat our forecast, although the bottom-line fell well short of our estimate due to higher-than-expected operating costs. Going forward, although we remain concerned about the company's earnings potential over our investment horizon, we expect to raise our revenue estimates given the stronger-than-expected 1Q 09 top-line result. Therefore, although the target price derived in our last update report does not support…

Going forward, we expect global steel prices to recover faster than we had previously expected. However, following the decline in demand for steel products, coupled with a global decline in steel prices, we expect the company to run at lower capacity utilization, resulting in a decline in production volume. Hence, overall we expect Gerdau’s top-line to decline significantly over the near to medium term. However, over the long-term, the company is…

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The Gerdau S.A. (Gerdau) preferred stock price has increased significantly since our previous update report, reflecting a broad-based rally in Brazilian equities and recovery in commodity prices. However, our fundamental outlook remains broadly unchanged and, therefore, we do not see further upside potential for the preferred stock. We maintain our HOLD rating, and will reassess our rating after the company releases…