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Investing.com -- Scotiabank initiated coverage of MercadoLibre (NASDAQ:MELI) with a Sector Outperform rating and a Street-high $3,500 price target given the company’s dominant position in Latin American e-commerce and fintech.
The brokerage expects roughly 46% upside from current levels and sees MercadoLibre as uniquely positioned to benefit from ongoing shifts toward online retail and digital banking in the region.
Scotia noted MELI’s expanding logistics network, tech infrastructure, and strong brand as key competitive advantages.
It called the company’s dual commerce and payments ecosystem a “peerless moat,” supported by over 100 million marketplace users and more than 64 million monthly fintech customers.
With free cash flow projected to grow at a 23% CAGR through 2028, Scotiabank (TSX:BNS) sees MercadoLibre entering a different league than regional peers.
Analysts also pointed to underpenetrated online retail in core markets like Mexico, Brazil, and Argentina, where e-commerce still accounts for only 15% of total retail sales, well below global benchmarks.
On the fintech side, MELI is seeking banking licenses in both Mexico and Argentina as it pushes toward becoming the largest digital bank in Latin America, supported by strong credit growth and consumer demand for digital services.
Scotiabank sees retail media as a potential growth engine, estimating that advertising revenue could more than double if MELI narrows the gap with global e-commerce peers.
Combined with logistics efficiencies, this could offset pressures from free shipping and lift margins further.