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>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

<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

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>WisdomTree has dropped ESG considerations while selecting stocks for the EMXSOE, CHXSOE and WTEMXC indices.</li>
<li>That results in a lot of inclusions and fewer deletions across indices that will be implemented at the close on 15 March.</li>
<li>The round-trip trade across the indices will exceed US$500m with <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> as the largest buy.</li>
</ul>


WisdomTree has dropped ESG considerations while selecting stocks for the EMXSOE, CHXSOE and WTEMXC indices.
That results in a lot of inclusions and fewer deletions across indices that will be implemented at the close on 15 March.
The round-trip trade across the indices will exceed US$500m with Tencent (700 HK) as the largest buy.


WisdomTree Indexes Special Rebalance: ESG Considerations Dropped

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: 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

WisdomTree Indexes Special Rebalance: ESG Considerations Dropped

WisdomTree has dropped ESG considerations while selecting stocks for the EMXSOE, CHXSOE and WTEMXC indices. The round-trip trade will be over...

Brian Freitas

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: 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

WisdomTree Indexes Special Rebalance: ESG Considerations Dropped

WisdomTree has dropped ESG considerations while selecting stocks for the EMXSOE, CHXSOE and WTEMXC indices. The round-trip trade will be over...

Brian Freitas

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