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MercadoLibre (MELI) high growth continues, Jefferies raises stock to Buy

May 20, 2024 1:59 PM

Jefferies raised its rating for MercadoLibre (NASDAQ: MELI) to Buy from Hold, lifting the price target to $2,100 from $1,400 in a note to clients on Monday, stating the company's high growth continues.

While MercadoLibre shares have recovered close to their 2021 peak, analysts at Jefferies expect the company's 2024 revenue to be close to triple that year. They also note that profitability has recovered strongly, and momentum is building in credit.

"We believe MELI is now established as a clear winner in e-commerce and should benefit from ongoing penetration upside as well as further improvements to monetisation and profitability through advertising and scale benefits in logistics, for example," argues the firm.

"Fintech transactional and financing services have displayed resilient growth and monetisation, and remain a key source of funding through working capital inflows, increasingly also due to cards issued, which are driving not only credit growth but also TPV (interchange revenue) and funding through payables to card networks," they add.

Jefferies estimates 2023 to 2028 CAGRs of 23% revenue, 27% EBIT, and 38% EPS, towards the high end of peers. They feel this justifies a premium multiple for the stock.

By Sam Boughedda


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