Financials & FinTech research, Galliano’s Financials Research

Victor Galliano

Victor Galliano is an experienced equity banks analyst, having covered Latin America banks and non-bank financials for over 12 years, as well as more recently covering the Italian banks. He has worked in sell side equity research for 30 years in a career spanning Barclays, HSBC, BBVA LatInvest, Barings and NatWest.
Galliano's Financials Research provides fundamental research in Emerging Markets financials, including FinTech, as well as financials in select Developed Markets.
The investment style applied is generally value oriented, although Growth At Reasonable Price (GARP) strategies can also be used where appropriate. Our investment research approach aim is often contrarian, looking to capitalise on overly sceptical or optimistic consensus views. In terms of valuation techniques, the focus is on PBV ratio to ROE, PE multiples and dividend yield, as well as the application of PEG ratios and, where appropriate, Sum of the Parts (SOTP) valuations.

Financials & FinTech research

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Financials & FinTech, EM & Developed Markets

Galliano’s Financials Research

Galliano's Financials Research provides fundamental research in Emerging Markets financials, including FinTech, as well as financials in select Developed Markets.

The investment style applied is generally value oriented, although Growth At Reasonable Price (GARP) strategies can also be used where appropriate. 

Our investment research approach aim is often contrarian, looking to capitalise on overly sceptical or optimistic consensus views. In terms of valuation techniques, the focus is on PBV ratio to ROE, PE multiples and dividend yield, as well as the application of PEG ratios and, where appropriate, Sum of the Parts (SOTP) valuations.

Equity Bottom-Up

<ul>
<li>We see further scope for consensus earnings and EBITDA disappointment at <a href="https://www.smartkarma.com/entities/mercadolibre-inc" target="_blank" data-smartkarma-citation="entities:27954:1" rel="noopener">MercadoLibre Inc (MELI US)</a>
</li>
<li>In the FinTech operations, where MELI is growing and investing in payments, the competitive pressure is intense, especially but not exclusively in Brazil</li>
<li>We think this intensely competitive environment, reflected in the high sales and marketing costs, will continue to pressure returns and EBITDA margins in the coming quarters</li>
<li>Consequently, we expect further cuts to consensus EPS and EBITDA estimates in the near term, and a prospective share de-rating</li>
<li>Risks to our thesis include less than expected pressure on Merchant Discount Rates in Brazil, boosting revenue growth and a stricter control of opex</li>
</ul>


We see further scope for consensus earnings and EBITDA disappointment at MercadoLibre Inc (MELI US)

In the FinTech operations, where MELI is growing and investing in payments, the competitive pressure is intense, especially but not exclusively in Brazil
We think this intensely competitive environment, reflected in the high sales and marketing costs, will continue to pressure returns and EBITDA margins in the coming quarters
Consequently, we expect further cuts to consensus EPS and EBITDA estimates in the near term, and a prospective share de-rating
Risks to our thesis include less than expected pressure on Merchant Discount Rates in Brazil, boosting revenue growth and a stricter control of opex


MercadoLibre (MELI) - FinTech Operations Opex Pressures to Weigh on Consensus Estimates