Key Takeaways
- BofA Securities maintains Buy rating on MELI stock with a $2,400 price target despite recent declines
- The company’s credit card portfolio surged to $6.6 billion in Q1 2026, representing 45% of its total lending portfolio after more than doubling YoY
- Analysts project credit card operations will post a $443M EBIT loss in 2026, then turn profitable by 2028 with $1.5B in EBIT expected by 2030
- Shares have declined 34.5% year-to-date compared to a 24% rally in the S&P 500, yet 85% of Wall Street maintains Buy ratings
- Scotiabank analyst Hector Maya holds the highest price target at $2,800, implying 72% upside from current trading levels
As of June 9, 2026, MercadoLibre shares are changing hands near $1,622, reflecting a substantial 34.5% decline year-to-date even as the broader S&P 500 index has surged 24%.
Yet despite this significant underperformance, Wall Street sentiment remains decidedly optimistic. An overwhelming 85% of analysts tracking the Latin American e-commerce and fintech giant maintain Buy ratings, with zero analysts setting price targets beneath current market values.
This week, Bank of America Securities reaffirmed its Buy recommendation while maintaining a $2,400 price objective. According to analyst Robert E. Ford Aguilar, the company’s expanding credit card operations represent the primary catalyst for long-term value creation, despite creating near-term margin headwinds.
MercadoLibre’s credit card portfolio experienced explosive growth in Q1 2026, more than doubling on a year-over-year basis to reach $6.6 billion. This segment now comprises roughly 45% of the firm’s entire loan portfolio.
Credit card monthly active users jumped 68% during the same timeframe, significantly outpacing the 29% growth in overall Mercado Pago monthly active users. By any standard, this represents exceptional momentum in a high-margin segment.
However, BofA forecasts the credit card division will record a $443 million EBIT loss throughout 2026. This translates to a 1.1 percentage point headwind on consolidated margins. Industry dynamics typically require 12 to 18 months for new credit card offerings to achieve net interest margin breakeven due to initial provisioning requirements.
The investment bank anticipates this segment reaching profitability by 2028, subsequently delivering $1.5 billion in EBIT by 2030. This trajectory would contribute an additional 2.2 percentage points to consolidated margins compared to 2026 levels.
Minimal Market Share Creates Substantial Runway
Notwithstanding the impressive credit card expansion, MercadoLibre commanded merely 3.4% of total credit card balances in Brazil and 2.5% in Mexico as of March 2026. This leaves considerable white space for continued growth.
The platform also introduced its credit card offering in Argentina, where it boasts 19.9 million daily active Pago app users — surpassing the 12.9 million it serves in Brazil. BofA’s Aguilar highlighted that reduced customer acquisition costs combined with stronger brand recognition should drive accelerated portfolio expansion as Argentina’s inflationary environment continues normalizing.
Argentina’s persistently low credit penetration, stemming from decades of macroeconomic volatility, presents a virtually greenfield opportunity.
Fundamental Metrics That Command Attention
Taking a broader perspective, MELI’s overall business has delivered 31% annualized growth over the past ten years. Total credit users expanded from 10 million in 2022 to 41.9 million by Q1 2026. The aggregate credit portfolio ballooned from $2.8 billion to $14.6 billion during this timeframe.
E-commerce adoption across Latin America stands at only 14%, trailing the 27% penetration rate in the United States and 32% in China. The estimated total addressable market reaches $5.5 trillion, compared to the company’s trailing 12-month revenue of $31.8 billion.
Buyers purchasing across at least three product categories surged 130% from 2022 through Q1 2026. Meanwhile, average quarterly transaction frequency climbed from 6.8 to 9 purchases over the identical period.
Scotiabank’s Hector Maya holds the Street’s most aggressive price target at $2,800 — representing 72% upside from current prices, although this actually reflects a reduction from his previous $3,500 objective.
BofA employs a sum-of-the-parts valuation framework: assigning the commerce segment 0.6x 2027 gross merchandise value and the fintech division 0.2x 2027 off-platform total payments value, yielding the $2,400 target price.
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