TLDR
- JPMorgan raised its MELI price target from $1,900 to $2,150, maintaining a “neutral” rating with ~13% implied upside from $1,897.51.
- MELI stock rose 4% to $1,897.51 following strong Q2 earnings that beat on both EPS and revenue.
- Q2 EPS came in at $9.19 vs. $8.65 expected; revenue hit $10.17 billion, up 49.8% year over year.
- A DCF analysis puts intrinsic value at ~$3,477 per share, suggesting the stock could be ~48% undervalued.
- The stock’s P/E of ~49.5x sits well above the industry average of ~20.2x, creating a split valuation picture.
MercadoLibre (MELI) stock jumped 4% to $1,897.51 on Tuesday after JPMorgan Chase raised its price target from $1,900 to $2,150, citing roughly 13.31% upside from current levels.
JPMorgan kept its “neutral” rating despite the bump. The move followed blowout Q2 earnings that sent the stock higher earlier this month.
MercadoLibre posted Q2 EPS of $9.19, beating the $8.65 consensus estimate by $0.54. Revenue came in at $10.17 billion, topping expectations of $9.79 billion and rising 49.8% compared to the same quarter last year.
That kind of top-line growth is hard to ignore. It’s the main driver behind the renewed analyst attention.
Cantor Fitzgerald went further than JPMorgan, raising its target from $2,150 to $2,300 and keeping an “overweight” rating. Raymond James holds a $2,000 target, while Daiwa downgraded the stock to “hold” with a $1,800 target in May.
Across the board, 11 analysts rate MELI a Buy and six say Hold. The consensus sits at “Moderate Buy” with an average target price of $2,272.
Valuation Split
The stock’s valuation depends heavily on which lens you use. A Discounted Cash Flow model, using the latest twelve-month free cash flow of approximately $12.5 billion, puts intrinsic value at around $3,477 per share. That implies the stock is roughly 47.6% undervalued on a cash flow basis.
But the earnings multiple tells a different story. MELI trades at a P/E of approximately 49.5x, more than double the multiline retail industry average of 20.2x and above the peer group average of 24.2x. A tailored fair P/E for MELI comes in around 40.1x, suggesting the current price carries a premium relative to earnings.
That’s the tension here. Cash flow optimists see meaningful upside. Earnings-focused investors see a stretched multiple.
Where the Stock Sits Technically
MELI’s 50-day moving average sits at $1,749.73, and its 200-day moving average is at $1,793.59. Tuesday’s close of $1,897.51 puts it above both.
The 12-month range runs from a low of $1,495.00 to a high of $2,548.50. The stock has returned about 40.4% over the past three years, though it has lagged peers over the past year with a decline of around 20.6%.
Market cap stands at $96.20 billion, with a PE ratio of 51.51 and a beta of 1.34.
Institutional Activity
Institutional ownership sits at 87.62%. Several smaller funds initiated new positions during Q4 last year, including Darwin Wealth Management, Laurel Wealth Advisors, and Transamerica Financial Advisors.
Insider ownership is low at 0.26%. Director Alejandro Nicolas Aguzin purchased 600 units of stock in May at an average price of $1,655.93, a transaction valued at approximately $993,558.
Sell-side analysts currently expect MercadoLibre to post full-year EPS of $40.69.
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