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On Wednesday, Cantor Fitzgerald analyst Deepak Mathivanan adjusted the price target for MercadoLibre (NASDAQ:MELI) shares, reducing it to $2,400 from the previous $3,000, while maintaining an Overweight rating. Currently trading at $2,118, with a market capitalization of $107 billion, InvestingPro analysis suggests the stock is fairly valued based on its proprietary Fair Value model. Mathivanan’s analysis included projections for the first quarter of 2025, with an estimated Gross Merchandise Volume (GMV) of $13.6 billion, which is 4% higher than the consensus. The Total (EPA:TTEF) Payment Volume (TPV) is expected to be $50.6 billion, slightly below the street’s expectations by 2%, and an EBIT of $604 million, compared to the street’s prediction of $657 million. InvestingPro data shows impressive financial health with a "GREAT" overall score, supported by strong revenue growth of 37.5% in the last twelve months.
The analyst did not anticipate MercadoLibre to provide guidance for the second quarter of 2025 or commentary on the second half of the year. However, it is believed that the company will continue to project year-over-year variability in margins. MercadoLibre’s shares have seen a 15% increase year-to-date, a rise attributed to the company’s lower exposure to tariffs. Despite the adjustments, Mathivanan sees significant growth potential for the company’s shares, trading at 25 times the forecasted fiscal year 2026 EBIT.
The reiteration of the Overweight rating by Cantor Fitzgerald signals confidence in MercadoLibre’s performance despite the revised price target. Mathivanan’s report justifies the new target price by taking into account recent foreign exchange movements and a moderation in credit margins.
MercadoLibre has been performing well in the stock market, with a notable increase since the start of the year. The price target adjustment by Cantor Fitzgerald reflects a recalibration in response to evolving market conditions, yet the firm’s stance on the stock remains positive. The Overweight rating suggests that analysts at Cantor Fitzgerald continue to expect MercadoLibre’s stock to outperform the broader market, even with the newly set expectations. For deeper insights, InvestingPro offers a comprehensive research report with detailed analysis of MELI’s valuation metrics, growth prospects, and 15+ additional ProTips.
In other recent news, MercadoLibre announced a significant investment of $5.8 billion in Brazil, aimed at expanding its operations and creating approximately 14,000 jobs. This investment, a 47.8% increase from the previous year, underscores the company’s focus on Brazil, which accounts for over half of its revenues. Additionally, MercadoLibre plans to bolster its workforce in Mexico by hiring 10,000 more employees by 2025, enhancing its technological, logistical, and financial capabilities in the country.
Analyst firms have shown optimism towards MercadoLibre’s future prospects. Benchmark initiated coverage with a Buy rating and a $2,500 price target, citing the company’s strong position in the Latin American e-commerce and fintech sectors. Similarly, BTIG maintained its Buy rating and $2,500 price target, noting MercadoLibre’s robust performance in its Fintech Services segment, with a 76% increase in total payment volume during the fourth quarter of 2024. Jefferies also raised its price target to $2,450, maintaining a Buy rating, and highlighted expected earnings growth driven by operational leverage and a higher commerce take rate.
These developments reflect MercadoLibre’s strategic investments and strong market positioning, as well as the positive sentiment from analysts regarding its growth potential in the Latin American region.
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