Credit Suisse Upgrades Mercadolibre, Hikes Price Target To $191

In a report published Tuesday, Credit Suisse analysts upgraded the rating on

from Neutral to Outperform, while raising the price target from $136 to $191. The company is poised to witness material value creation through the release of various promotional tools to help sellers generate incremental sales. "Specifically, these can be display ads appearing on the home page or CPC/search advertising which lead consumers directly to a product listing page—these types of products are already live in other marketplaces globally," the analysts mentioned. The analysts are optimistic that sellers in Latin America will take to the company's new promotional tools in a similar way as in China and South Korea. Increased adoption of Mercadolibre's new products will allow it to "show progressively increasing consolidated take rates," the analysts added. The near-term estimates for the company decline due to continued devaluation of the Venezuela bolivar Fuertes versus the US dollar, but longer-term estimates work materially higher. The adjusted EPS estimates for FY15 and FY16 are $2.12 and $3.14, respectively.