Scotiabank Analyst Sees 55% Upside for MercadoLibre Despite Margin Collapse

Earnings

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Summary · why it matters

Scotiabank analyst Hector Maya maintains a Sector Outperform rating and a Street-high $2,800 price target on MercadoLibre, implying roughly 55% upside from the current $1,799.21, even after a severe first-quarter margin collapse. Revenue rose 49% year-over-year to $8.85 billion, beating consensus, but operating income fell 20% to $611 million as provisions for doubtful accounts more than doubled to $1.244 billion and adjusted free cash flow turned negative. The company extended average Brazilian loan terms from five to eight months and pushed into riskier borrower segments, triggering a 15.8% share drop in the first week after the report. Despite the sell-off, 20 of 24 analysts still rate the stock a Buy, with bulls arguing the margin reset is a deliberate investment cycle that will reverse as newer credit card cohorts season and shipping subsidies stabilize. MercadoLibre shares are down 10.68% year to date, trailing the S&P 500 by more than 20 percentage points, while peers Sea and Nu Holdings have also fallen on similar credit-provision concerns.