Goldman Sachs Sees 27% Upside in MercadoLibre (MELI) and Raises Rating to 'Buy'

(Updated - December 7, 2016 9:49 AM EST)

Goldman Sachs upgraded MercadoLibre (NASDAQ: MELI) from Neutral to Buy with a price target of $200, implying upside of 27%. Analyst Irma Sgarz sees a compelling entry point.

"Since Sept 22, when shares peaked at US$191, the stock is down 17% though fundamentals have improved, which we believe was mainly driven by technical factors and FX volatility. Therefore, we now see a compelling entry point into a strong structural growth story that offers exposure to the secular online shift of retail across Latam. We see room for upward revisions in consensus earnings to continue, as we raise 2016-18E EPS by on avg +22%, putting our 2017/18E EPS 14%/7% above consensus," said the analyst.

Sgarz added, "Micro dodges a difficult macro in Brazil, as we expect growth momentum to be sustained by upgrades to site functionalities (e.g. a shopping cart for single check-out) and a rising penetration of services to support take-rates. Our competitive analysis of marketplace platforms shows that MELI remains competitive for small sellers, in spite of increasing competition from online retailers that have launched marketplace operations."

For an analyst ratings summary and ratings history on MercadoLibre click here. For more ratings news on MercadoLibre click here.

Shares of MercadoLibre closed at $157.55 yesterday.

You May Also Be Interested In

• UBS Reiterates Neutral Rating on LVMH Moet Hennessy Louis Vuitton SE (MC:FP) (LVMUY)
• TripAdvisor (TRIP) PT Raised to $28 at Citi
• Midday movers: Travelers, JB Hunt fall; United Airlines rises