MELI - Why Mercado Libre Stock Took a Big Dive Today
2023-07-10 18:33:54 ET
Storied South American e-commerce company MercadoLibre (NASDAQ: MELI) experienced a bit of a fire sale on the stock market Monday. Its shares closed the day almost 5% lower on the back of a recommendation downgrade from a prominent U.S. bank. By contrast, the S&P 500 index did relatively well, rising by 0.2%.
The downgrade came from none other than Big Four lender Bank of America . That morning, analyst Robert Ford Aguilar pushed his recommendation on MercadoLibre down one peg to neutral. Prior to that, he had tagged the e-commerce specialist as a buy. His move was accompanied by a price target cut to $1,350 per share from the preceding $1,680.
The source of Aguilar's concern is a set of new cross-border commerce regulations in Brazil. Transactions of up to the equivalent of $50 are subject to a 17% value-added tax (VAT), although they are exempted from a 60% import tariff.
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Why Mercado Libre Stock Took a Big Dive Today