JPMorgan downgraded MercadoLibre to Neutral from Overweight with an unchanged price target of $2,400. The firm cites the stock’s 62% rally over the past year for the downgrade. It also sees limited room for upward consensus revisions. The analyst expects short-term pressure on MercadoLibre’s results coming from the ramping up of the credit card business and substantial increase in logistical capabilities, as well as a normalization of income tax rate and currency losses. The company’s credit results should be pressured by credit cards and its new distribution centers are likely to weigh on margins, contends JPMorgan.
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