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In a report published on Friday, JP Morgan analyst Andre Baggio downgraded
MercadoLibre MELI from Overweight to Neutral and raised the price target from $101.00 to 120.00.
In the report, JP Morgan noted, "We see valuation as fair given existing downside risks, including: (1) devaluation in Venezuela, as parallel markets are trading at 28.4 VEF/USD, ~350% above official rates of 6.3; (2) Brazilian currency depreciating further; (3) increase in competition, with large players such as Amazon launching market place operations in LatAm; (4) economic weakness in the region, softening consumption. It is noteworthy that Argentina parallel FX markets also points to a potential devaluation, but impact on MELI should be low, in our view, as their costs tend to compensate for their revenues in that country."
Mercadolibre closed on Thursday at $117.24.
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