Bofa reaffirms purchases with Mercadolibre (Meli) and maintains its $3,000 target
Bofa Securities is available at Mercadolibre (NASDAQ: Meri) On June 6th, it is stable with a price target of $3,000. The company considers the company well-placed despite the expected short-term impact from recent changes to Brazilian shipping models.
Analysts estimate that around 20% of Mercadolibre’s GMV in Brazil comes from orders between R$19 and R$79. As the company tweaks its free shipping policy, BOFA predicts a net hit with shipping revenue of around $350 million.
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However, they argue that a 30% improvement in delivery density will help balance costs. Additional support could come from strong revenues in Argentina or a 1% conflict in advertising penetration.
According to BOFA, the timing of shifts in transportation strategies reflects the broader driving force for optimizing fulfillment. Meanwhile, increasing consumer engagement in new categories and more focused advertising pushes are seen as strengthening long-term plans. I shared details last month A strong paper Meristoquo too.
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Disclosure: None.