MercadoLibre upgraded at Bank of America after 'great Black Friday'

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MercadoLibre upgraded at Bank of America after 'great Black Friday'
Credit: © Reuters.

Bank of America analysts raised the recommendation on Mercadolibre (MELI) stock to Buy from Neutral, citing great Black Friday performance.

The price target has been raised by as much as $650 to $2000 per share.

Mercarolibre’s early Black Friday data points to “strong momentum,” said the analysts. Partial results from Thursday, November 23rd, and Friday, November 24th (until 5 pm) reveal an impressive 80% year-on-year increase in Brazilian Gross Merchandise Volume (GMV).

This growth stands out as the overall market in Brazil experienced a contraction of 15.1% YoY, according to BofA. Moreover, MercadoLibre (NASDAQ: MELI ) reported a robust 39% year-on-year growth in Brazilian GMV for the month of November to date. In Mexico, MELI disclosed a significant 40% GMV growth during its Buen Fin promotional event.

Consumer electronics sales experienced a remarkable 140% growth in Brazil during the Black Friday event, with notable strength observed in categories such as cell phones, notebooks, and TVs.

MELI shares rose 4.2% yesterday on Black Friday news. The stock is up nearly 90% since the start of this year.

“We perceive considerable vibrancy across all other areas of MELI's platform. Higher-for-longer interest rates are accelerating the shift to digital commerce and facilitating MELI's 1P growth. Improving MELI data sets and algorithms are also enabling a reacceleration of fintech,” the analysts wrote in an upgrade note.

“Argentina's incoming administration is expected to allow moves into crypto and spur opportunity in asset and lending products. Loyalty, merchant couponing and infrastructure are speeding platform growth rates and lifting delivery density. Ad penetration rates are also poised to accelerate, in our view,” the analysts concluded.

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