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On Thursday, JPMorgan analyst Marcelo Santos increased the price target on MercadoLibre (NASDAQ:MELI) stock to $2,600 from the previous $2,250 while maintaining a Neutral rating. The adjustment follows MercadoLibre’s strong performance in the first quarter of 2025, with revenue growth of 37.68% year-over-year and impressive gross profit margins of 52.24%. According to InvestingPro data, four analysts have recently revised their earnings upward for the upcoming period, reflecting growing confidence in the company’s trajectory.
Santos highlighted the factors contributing to the new price target, noting, "We update our estimates on MELI following another strong quarter in 1Q25, and we increase our estimates and PT to reflect a higher contribution from Argentina, as well as a better credit and 1P result." These positive results were somewhat balanced by increased investments in Brazil and Mexico. InvestingPro’s analysis shows the company maintains strong financial health with an overall score of 3.52 (rated as "GREAT"), suggesting robust operational execution despite the investment phase.
Despite the improved forecast, JPMorgan remains cautious, citing MercadoLibre’s valuation as steep at 52 times the projected 2025 earnings per share. The current P/E ratio stands at 63.73, with the stock trading near its 52-week high of $2,625.11. The expected EPS compound annual growth rate (CAGR) from 2025 to 2028 is estimated at 35%. The firm’s stance is also influenced by the evolving competitive landscape in Brazil, where Shopee is expanding its logistics operations and could pose a more direct challenge to MercadoLibre. For deeper insights into MercadoLibre’s valuation metrics and competitive position, investors can access the comprehensive Pro Research Report available on InvestingPro.
In response to the intensifying competition, MercadoLibre has taken strategic steps such as lowering shipping fees for merchants on items priced between R$79 and R$200. This move is seen as a defensive strategy to maintain its market position amidst the growing presence of competitors like Shopee.
JPMorgan’s latest analysis reflects a careful consideration of MercadoLibre’s recent financial results, market strategies, and the competitive dynamics within the e-commerce industry in Latin America. The firm’s neutral stance on the stock suggests a watchful approach as the market continues to evolve.
In other recent news, MercadoLibre has reported outstanding financial results, with revenues and earnings before interest and taxes (EBIT) surpassing Wall Street expectations by 8% and 20%, respectively. The e-commerce giant’s Gross Merchandise Volume (GMV) saw a notable increase, particularly in Argentina, where it rose by 126% year-over-year, excluding foreign exchange impacts. Additionally, the company’s fintech division experienced robust growth, with a 119% increase in fintech revenue in Argentina, driven by an expanding credit portfolio. Analysts from Benchmark, Cantor Fitzgerald, and BTIG have responded positively, raising their price targets for MercadoLibre stock to $2,875, $2,900, and $2,750, respectively, while maintaining favorable ratings.
The company’s credit division, Mercado Crédito, showcased significant growth, particularly in Argentina, contributing to a substantial expansion of its Total (EPA:TTEF) Payment Volume (TPV). Despite some challenges in Mexico, MercadoLibre’s overall performance was bolstered by strong results in Argentina and Brazil. Analysts have noted the company’s strategic investments in logistics and credit card services, which are expected to drive further growth. BTIG highlighted the resilience of the Latin American market, noting minimal reciprocal tariffs impacting key regions like Brazil and Argentina.
In leadership news, MercadoLibre announced a transition with Ariel Szarfsztejn set to become the President and CEO in 2026, succeeding Marcos Galperin, who will move to the role of Executive Chairman. This leadership change is part of the company’s long-term strategy, with Szarfsztejn having held several key positions within the organization since 2017. The company has not yet disclosed the compensation details for Galperin and Szarfsztejn in their new roles. These recent developments reflect MercadoLibre’s strong market position and strategic focus in Latin America.
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