JPMorgan Lowers MercadoLibre Inc. (MELI) Price Target amid Competition Pressure

MercadoLibre Inc. (NASDAQ:MELI) is one of the top stocks in Michael Burry’s stock portfolio. On October 3, JPMorgan reiterated a ‘Neutral’ rating on the stock but cut the price target to $2,600 from $2,700. The cut comes amid concerns that the company faces competitive pressures in Brazil, which could trigger an earnings miss in the third quarter.

The company is reportedly facing competition from Amazon and Shopee. To start, Amazon has intensified its efforts in the country with the establishment of new logistics facilities and pickup locations. In addition, the US e-commerce giant has waived Fulfillment by Amazon (FBA) fees, aiming to take on MercadoLibre.

“We recap recent developments in the Brazilian e-commerce competitive environment, which reinforce our view that growth should come at a higher cost to MELI in the coming years,” JPMorgan analysts wrote.

Amid the competitive pressure, JPMorgan expects the company to deliver $7.44 in Q3 revenue, which would be 3% above consensus estimates. Nevertheless, it forecasts EBIT of $750 million, which would be below $811 consensus estimates. Earnings are also expected to average $477 million, compared to the previously expected $551 million.

MercadoLibre Inc. (NASDAQ:MELI) is a Latin American technology company that provides e-commerce, fintech, and logistics solutions to individuals and businesses. It operates a large online marketplace for buying and selling goods. Its payment platform, Mercado Pago, enables various online and offline transactions and offers financial services.

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Disclosure: None. This article is originally published at Insider Monkey.