EM Spreads

Leandro Gubler

Independent Insight Provider

Credit

<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

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 recently reported its earnings for Q1 of 2024.</li><li>The company has continued its robust trend, with Brazil and Mexico being their primary growth engines.</li><li>Both markets recorded growth in Gross Merchandise Value (GMV) of approximately 30% YoY. This expansion was propelled by their strategic investments in tech infrastructure, targeted marketing campaigns, and focus on enhancing user experience.</li></ul>

MercadoLibre recently reported its earnings for Q1 of 2024.The company has continued its robust trend, with Brazil and Mexico being their primary growth engines.Both markets recorded growth in Gross Merchandise Value (GMV) of approximately 30% YoY. This expansion was propelled by their strategic investments in tech infrastructure, targeted marketing campaigns, and focus on enhancing user experience.

MercadoLibre Inc.: Expansion of Fintech Offerings

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.


<ul><li>MercadoLibre Inc., a Latin America-based eCommerce platform, had an impressive financial performance in Q4 of 2023, ending the fiscal year on a high note.</li><li>The company saw a 42% increase in revenues, a considerable enhancement of its EBIT margin, and a steadfast growth in its base of active users, surpassing the 50 million mark in a single quarter for the first time.</li><li>This considerable growth was spearheaded by the company's Commerce and FinTech initiatives.</li></ul>

MercadoLibre Inc., a Latin America-based eCommerce platform, had an impressive financial performance in Q4 of 2023, ending the fiscal year on a high note.The company saw a 42% increase in revenues, a considerable enhancement of its EBIT margin, and a steadfast growth in its base of active users, surpassing the 50 million mark in a single quarter for the first time.This considerable growth was spearheaded by the company's Commerce and FinTech initiatives.

MercadoLibre Inc: Expanded Logistics Network

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: 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 Inc.: Expansion of Fintech Offerings

MercadoLibre recently reported its earnings for Q1 of 2024. The company has continued its robust trend, with Brazil and Mexico being their primary...

Baptista Research

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

MercadoLibre Inc: Expanded Logistics Network

MercadoLibre Inc., a Latin America-based eCommerce platform, had an impressive financial performance in Q4 of 2023, ending the fiscal year on a...

Baptista Research

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52-week Range

Market Cap (USDm)

P/E

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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 Inc.: Expansion of Fintech Offerings

MercadoLibre recently reported its earnings for Q1 of 2024. The company has continued its robust trend, with Brazil and Mexico being their primary...

Baptista Research

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

MercadoLibre Inc: Expanded Logistics Network

MercadoLibre Inc., a Latin America-based eCommerce platform, had an impressive financial performance in Q4 of 2023, ending the fiscal year on a...

Baptista Research

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...