Mercadolibre (MELI) has received a new Buy rating, initiated by Benchmark Co. analyst, Fawne Jiang.
Fawne Jiang has given his Buy rating due to a combination of factors that highlight Mercadolibre’s strong position and growth potential in the Latin American market. The company is a dominant leader in the region’s e-commerce sector, which remains underpenetrated compared to global standards, providing a significant opportunity for expansion. With a substantial share of the online retail market and a deep understanding of its customer base, Mercadolibre is well-positioned to capitalize on the anticipated double-digit growth in the industry through 2029.
Moreover, Mercadolibre’s ecosystem approach, which integrates e-commerce and fintech services, offers a competitive advantage by driving growth and cost efficiency. This synergy allows for effective cross-selling and enhances user engagement, creating a long-term competitive barrier. Although short-term investments may impact margins, the company’s commitment to long-term sustainable growth through investments in logistics, new products, and technology supports its robust growth outlook. The valuation, based on a projected 34% CAGR in earnings and a 38x multiple, underscores the potential for earnings leverage, despite risks such as macroeconomic volatility and rising competition.
In another report released yesterday, Citi also maintained a Buy rating on the stock with a $2,450.00 price target.