Habib Ur Rehman
1 min read
In This Article:
BofA Securities reiterated its Buy rating on MercadoLibre (NASDAQ: MELI) on June 6, holding steady with a $3,000 price target. The firm sees the company as well-positioned despite expected short-term impacts from recent changes to its shipping model in Brazil.
Analysts estimate that about 20% of MercadoLibre’s GMV in Brazil comes from orders priced between R$19 and R$79, a segment tied to slower shipping options like MELI Delivery Day and excluding cross-border or grocery purchases. As the company tweaks its free shipping policies, BofA projects a net hit of roughly $350 million in shipping revenue.
Copyright: prykhodov / 123RF Stock Photo
However, they argue that a 30% improvement in delivery density could help balance the cost. Additional support could come from stronger earnings in Argentina or even a 1% bump in advertising penetration.
The timing of the shift in shipping strategy, according to BofA, reflects a broader push to optimize fulfillment. Meanwhile, rising consumer engagement across new categories and a more focused ad push are seen as reinforcing the long-term plan. Last month we shared a detailed bullish thesis on MELI stock as well.
While we acknowledge the potential of MELI as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.
READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money.
Disclosure: None.
