Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

Equity Bottom-Up

<ul><li>MercadoLibre's financial performance in the second quarter of 2024 highlighted robust growth and profitability, demonstrating strong execution across its primary business segments: commerce and fintech.</li><li>Notably, Marcos Galperin, the company’s CEO, reiterated MercadoLibre's commitment to enhancing the financial and operational accessibility for numerous small and medium-sized enterprises across Latin America, a principle that has been foundational since the company's inception 25 years ago.</li><li>From a financial perspective, the revenue reached $5.1 billion, marking a significant year-over-year growth of over 40%.</li></ul>

MercadoLibre's financial performance in the second quarter of 2024 highlighted robust growth and profitability, demonstrating strong execution across its primary business segments: commerce and fintech.Notably, Marcos Galperin, the company’s CEO, reiterated MercadoLibre's commitment to enhancing the financial and operational accessibility for numerous small and medium-sized enterprises across Latin America, a principle that has been foundational since the company's inception 25 years ago.From a financial perspective, the revenue reached $5.1 billion, marking a significant year-over-year growth of over 40%.

MercadoLibre Inc.: Strategic Utilization of Distribution Space in Brazil & Other Major Drivers

Senior Credit Analyst - Emerging Markets, EM Spreads

Leandro Gubler

Senior Credit Analyst - Emerging Markets

EM Spreads

Credit

<ul>
<li>We maintain our Outperform recommendation on MercadoLibre with a preference for MELI 2.375% 2026 bonds. We remain optimistic about the company’s overall financial and business risks.</li>
<li>Revenues increased by 41.5% (FX-neutral: 113%) to $5.1 billion in 2Q24. However, the EBIT margin contracted significantly by 440 bps to 14.3% from 18.7%.</li>
<li>MELI ended the quarter with $976mn in net debt, down from $1.4 bn sequentially. Gross leverage remained relatively stable at 1.8x, and net leverage improved by 0.2x sequentially to 0.3x.  </li>
</ul>


We maintain our Outperform recommendation on MercadoLibre with a preference for MELI 2.375% 2026 bonds. We remain optimistic about the company’s overall financial and business risks.
Revenues increased by 41.5% (FX-neutral: 113%) to $5.1 billion in 2Q24. However, the EBIT margin contracted significantly by 440 bps to 14.3% from 18.7%.
MELI ended the quarter with $976mn in net debt, down from $1.4 bn sequentially. Gross leverage remained relatively stable at 1.8x, and net leverage improved by 0.2x sequentially to 0.3x.  


MercadoLibre 2Q24: Fintech Credit Fuels Commerce Growth

<ul>
<li>S&amp;P revised MELI’s credit rating outlook to positive from stable and affirmed its BB+ issuer credit rating.</li>
<li>MELI's credit metrics are considerably stronger than its peers in the high-yield rating category</li>
<li>MELI’s bonds have arguably already been trading at the investment grade level, supported by the company’s solid credit metrics for the rating category.</li>
</ul>


S&amp;P revised MELI’s credit rating outlook to positive from stable and affirmed its BB+ issuer credit rating.
MELI's credit metrics are considerably stronger than its peers in the high-yield rating category
MELI’s bonds have arguably already been trading at the investment grade level, supported by the company’s solid credit metrics for the rating category.


MercadoLibre: Analyzing the Market Reaction to S&P’s Outlook Change

<ul>
<li>We are initiating coverage on MercadoLibre with a preference for MELI 2.375% 2026 bonds.  We are optimistic about MELI’s overall financial and business risks.</li>
<li>For EM investors, we prefer MELI 2.375% 2026 notes with a 10-30 bps compression potential. These bonds are trading wide compared to the Brazilian Sovereign and the benchmarks. </li>
<li>For US investors, MELI's risk-reward symmetry is especially compelling, given that 2031 bonds are trading wide by around 75 bps compared to global e-commerce and fintech peers. </li>
</ul>


We are initiating coverage on MercadoLibre with a preference for MELI 2.375% 2026 bonds.  We are optimistic about MELI’s overall financial and business risks.
For EM investors, we prefer MELI 2.375% 2026 notes with a 10-30 bps compression potential. These bonds are trading wide compared to the Brazilian Sovereign and the benchmarks. 
For US investors, MELI's risk-reward symmetry is especially compelling, given that 2031 bonds are trading wide by around 75 bps compared to global e-commerce and fintech peers. 


MercadoLibre: A Credit Look into the Latin American Rising Star

Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

<ul>
<li>Despite MercadoLibre’s non-benchmark status, ownership among active EM managers has reached new highs.</li>
<li>MercadoLibre has been the beneficiary of significant manager rotation over the last year, with 131 funds increasing weights and 29 opening new positions.</li>
<li>MercadoLibre is now the 8th largest holding on an average weight basis and has recently overtaken AIA Group as the largest overweight stock position across all regions.</li>
</ul>


Despite MercadoLibre’s non-benchmark status, ownership among active EM managers has reached new highs.
MercadoLibre has been the beneficiary of significant manager rotation over the last year, with 131 funds increasing weights and 29 opening new positions.
MercadoLibre is now the 8th largest holding on an average weight basis and has recently overtaken AIA Group as the largest overweight stock position across all regions.


Brazil

MercadoLibre, Inc. operates an online trading site for the Latin American markets. The Company's website allows businesses and individuals to list items, conduct sales, and purchases online in either a fixed-price and auction format. MercadoLibre offers classified advertisements for motor vehicles, vessels, aircraft, and real estate, as well as online payment services.

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MercadoLibre (MELI US)

MercadoLibre Inc.: Strategic Utilization of Distribution Space in Brazil & Other Major Drivers

MercadoLibre's financial performance in the second quarter of 2024 highlighted robust growth and profitability, demonstrating strong execution...

Baptista Research

MercadoLibre 2Q24: Fintech Credit Fuels Commerce Growth

Maintaining Outperform recommendation on MercadoLibre, optimistic about the company's overall financial and business risks, despite the concerning...

Leandro Gubler

MercadoLibre: Analyzing the Market Reaction to S&P’s Outlook Change

S&P upgrades MELI's credit rating outlook to positive, citing strong credit metrics and potential investment grade status for bonds.

Leandro Gubler

MercadoLibre: A Credit Look into the Latin American Rising Star

Initiating coverage on MercadoLibre with a preference for MELI 2.375% 2026 bonds due to an optimistic financial outlook and attractive risk-reward...

Leandro Gubler

MercadoLibre's Bullish Run Continues

MercadoLibre has been the beneficiary of significant manager rotation over the last year, overtaking AIA Group as the largest overweight stock...

Steven Holden

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

MercadoLibre Inc.: Strategic Utilization of Distribution Space in Brazil & Other Major Drivers

MercadoLibre's financial performance in the second quarter of 2024 highlighted robust growth and profitability, demonstrating strong execution...

Baptista Research

MercadoLibre 2Q24: Fintech Credit Fuels Commerce Growth

Maintaining Outperform recommendation on MercadoLibre, optimistic about the company's overall financial and business risks, despite the concerning...

Leandro Gubler

MercadoLibre: Analyzing the Market Reaction to S&P’s Outlook Change

​S&P upgrades MELI's credit rating outlook to positive, citing strong credit metrics and potential investment grade status for bonds.

Leandro Gubler

MercadoLibre: A Credit Look into the Latin American Rising Star

​Initiating coverage on MercadoLibre with a preference for MELI 2.375% 2026 bonds due to an optimistic financial outlook and attractive risk-reward...

Leandro Gubler

MercadoLibre's Bullish Run Continues

MercadoLibre has been the beneficiary of significant manager rotation over the last year, overtaking AIA Group as the largest overweight stock...

Steven Holden

S&P upgrades MELI's credit rating outlook to positive, citing strong credit metrics and potential investment grade status for bonds.

Initiating coverage on MercadoLibre with a preference for MELI 2.375% 2026 bonds due to an optimistic financial outlook and attractive risk-reward...