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.
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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.
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Disclosure: None.
