Another Margin Reset as MELI Invests Behind Ecosystem Dominance

Goldman Sachs maintains a Buy rating on MercadoLibre but lowered its price target to $2,100 after 1Q26 results triggered a reset of 2026 EBIT margin expectations to 7%. The margin pressure stems from strategic investments in Brazil's marketplace competitiveness and AI tool deployment.

Key Takeaways

• 1.MELI has reset its 2026 EBIT margin expectation to 7% (down from 9%) to fund aggressive investments in ecosystem dominance.
• 2.Investment focus is primarily on take-rate discounts for Brazilian sellers and the scaling of AI tools across the organization.
• 3.Despite near-term margin pressure, Goldman Sachs remains confident in a long-term return to double-digit margins (11% by 2029E).

Table of Contents

• Incremental investments moving 2026 EBIT margin expectation to 7% from 9%
• Expectation reset for 2026 and outlook beyond
• Long-term EBIT margins can return to double digits
• Segment-by-segment margin assumptions
• Our view in charts: MELI Commerce division
• Our view in charts: MELI Fintech division
• Estimate changes
• Valuation methodology and key risks
• Disclosure Appendix

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