Jefferies raises MercadoLibre stock target to $2,450, maintains Buy

On Tuesday, Jefferies analyst John Colantuoni increased the price target for MercadoLibre (NASDAQ:MELI) shares to $2,450 from the previous target of $2,250, while reaffirming a Buy rating for the stock. The adjustment reflects a positive outlook on the company’s future earnings, driven by a higher commerce take rate and operational leverage. This aligns with broader analyst sentiment, as InvestingPro data shows analyst targets ranging from $1,840 to $3,000, with six analysts recently revising their earnings estimates upward.Want deeper insights? InvestingPro offers exclusive access to detailed financial analysis and 14 additional key insights for MercadoLibre.

Colantuoni’s analysis suggests that MercadoLibre’s earnings estimates for the years 2025 to 2027 should see an uplift of 8-13%. This uptick is expected to result from improved operational efficiency and an increase in the commerce take rate, leading to an 8-10.5% rise in EBIT projections. The company’s revenue is anticipated to surpass consensus forecasts, with projections 1.3%-6.8% higher than various analysts’ in the same timeframe. The optimism appears well-founded, given MercadoLibre’s impressive 37.53% revenue growth over the last twelve months and robust gross profit margin of 52.67%.

The analyst noted that while margins might fluctuate due to investments in growth initiatives, the trend of increasing operational leverage is likely to enhance the underlying profitability of MercadoLibre. Despite maintaining a slightly more conservative stance on margin progression, the earnings per share (EPS) estimates for 2025 and 2026 align closely with consensus, with a roughly 4% higher expectation for 2027 and 2028.

Jefferies’ updated price target of $2,450 reflects confidence in MercadoLibre’s capacity to continue its robust performance and capitalize on its operational strengths. The firm’s endorsement of a Buy rating indicates a belief in the stock’s potential for growth and a favorable investment profile.

In other recent news, MercadoLibre has reported impressive fourth-quarter earnings, significantly surpassing expectations. The company achieved an earnings before interest and taxes (EBIT) of $820 million, well above the Street’s estimate of $615 million. Analysts from Cantor Fitzgerald and BTIG have responded to these results by raising their stock price targets to $3,000 and $2,500, respectively. Raymond (NSE:RYMD) James also increased its target to $2,650, praising the company’s improved fintech profitability and reduced fulfillment challenges.

MercadoLibre reported a 56% growth in total Gross Merchandise Volume (GMV) when excluding foreign exchange impacts, along with a 27% increase in units sold. The company’s fintech segment showed promising signs, with credit performance remaining strong despite a tightening interest rate environment. Citi analyst Tobias Stingelin maintained a Buy rating with a $2,250 target, noting improvements in MercadoLibre’s credit portfolio and a decrease in delinquency rates.

The company also disclosed its financial results for the fourth quarter and full year of 2024, emphasizing transparency with investors. MercadoLibre’s Net Interest Margin After Loss (NIMAL) improved to 27.6% in the fourth quarter, attributed partly to an extra pay period. Despite some projected slowdowns in card growth, analysts remain optimistic about MercadoLibre’s strategic positioning and potential for margin expansion.

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