MercadoLibre Stock: BofA Reiterates ‘Buy’ Amid Fintech Growth

🔥 Main Takeaway

Bank of America just double-downed on MercadoLibre (MELI) with a ‘Buy’ rating, betting on its booming credit business and strong Brazil growth, even as valuation debates heat up.

📌 What Happened?

Bank of America Securities reaffirmed its ‘Buy’ rating for MercadoLibre (MELI).

The call is driven by MELI’s credit card business, which saw its portfolio more than double in Q1 2026.

Brazil operations are crushing it, with 38% FX neutral gross merchandise volume growth and a 56% jump in items sold.

Shipping costs per unit dropped 17% in Brazil, even with higher volumes, showing efficiency gains.

💰 Why It Matters

MELI’s fintech game is strong: the credit card expansion signals a deeper push into financial services, boosting ecosystem stickiness for young consumers and investors.

Brazil’s growth numbers are massive, showing the company’s core e-commerce and logistics are still firing on all cylinders in a key market.

Despite a recent rally, MELI’s stock is down 10.66% YTD and 29.86% over one year, but its 3-year return is a solid 52.83%—signaling long-term potential for wealth creation.

Valuation is a hot topic: one model suggests it’s 22.8% undervalued at $2,284.19, while its P/E of 46.6x is way above the Multiline Retail industry average of 18.8x, implying a premium that requires justification.

👀 What to Watch Next

Keep an eye on credit losses: as the loan book grows, managing defaults will be key to sustaining fintech profitability and investor confidence.

Consumer spending in Latin America, especially Brazil, Mexico, and Argentina, will dictate e-commerce and credit health, directly impacting MELI’s revenue streams.

Analysts will be watching if MELI can justify its premium valuation with continued high revenue growth and margin expansion, crucial for its stock performance.