BTIG reiterates MercadoLibre stock Buy rating with $2,400 target By Investing.com

BTIG kept a Buy rating on MercadoLibre and raised its price target to $2,400 from $2,650, while trimming full-year 2026 EPS to $47.56 from $47.95, still below the $53.41 consensus. The firm expects about $3.6 billion of full-year operating income, roughly 9% margins, and about $120 million less first-half 2026 operating income, partly offset by lower FX losses as the Argentine peso converges. Other brokers were mixed, with Jefferies upgrading to Buy and Raymond James cutting its target to $2,250 but keeping Strong Buy.

Analysis

The key signal is not the top-line guidance reset, but the composition of it: weaker near-term margin versus unchanged long-duration earning power implies the market should treat this as a timing shift, not a thesis break. That matters because MELI is still in the phase where incremental capital is being recycled into payments, credit, and logistics density; when the business is compounding share, short-term margin compression can coexist with multi-year equity value creation. The recent FX normalization also removes one of the cleaner hidden drags on reported earnings, which means future estimate revisions can look better even if operating discipline stays unchanged.

The second-order winner is the ecosystem around MELI’s credit push. Faster card issuance likely pressures reported provision expense first, but it also deepens engagement and raises switching costs, which can matter more than a few dozen basis points of margin in a market still underpenetrated in digital commerce and payments. If Brazil share gains are real, local competitors face a worse mix of higher fulfillment intensity and lower pricing power, while regional fintech and marketplace names without MELI’s balance sheet get forced into either subscale growth or capital dilution.

The contrarian read is that consensus may be too anchored to the wrong near-term metric: headline EPS versus operating momentum. In a name with this much embedded optionality, a small cut to next-year EPS can coexist with a higher long-run multiple if investors believe the company is buying durable share with disciplined unit economics. The main risk is a sequencing problem over the next 1-2 quarters: if provisions rise faster than gross profit leverage or if FX stops helping, the stock can derate on “quality of growth” even if the medium-term story remains intact.

Key Decisions for Investors

• Add to MELI on 5-10% post-earnings weakness or any selloff tied to provision noise; use a 6-12 month horizon and target a re-rating as margin visibility improves. Risk/reward is favorable if management keeps proving that incremental credit investment converts into higher payment volume and retail frequency.
• Pair long MELI / short a basket of regional e-commerce laggards or local fintechs with weaker scale economics for a 3-6 month relative-value trade. The thesis is that market share gains plus FX normalization should widen MELI's operating leverage versus less capitalized competitors.
• If owning stock outright, finance part of the position with covered calls 10-15% above spot over the next 2-3 months. This captures upside while monetizing elevated uncertainty around near-term provisions and margin seasonality.
• Avoid adding on the basis of revised EPS alone; wait for confirmation that first-half 2026 margin pressure is peaking before treating the current estimate reset as a final floor. The key catalyst is not the next print but evidence of faster-than-expected operating leverage in Brazil and Argentina.