Investing.com – Bank of America Securities reiterated its buy rating on MercadoLibre stock () as the firm projected substantial long-term profitability from the company’s credit card business despite near-term margin pressure from aggressive investments across multiple business lines.
The Latin American e-commerce leader more than doubled its credit card portfolio year-over-year in the first quarter of 2026, reaching $6.6 billion and representing approximately 45% of MercadoLibre’s total loan book. Credit card monthly active users rose 68%, outpacing total Mercado Pago monthly active user growth of 29%. Despite the rapid expansion, Bank of America analyst Robert E. Ford Aguilar estimated MercadoLibre held just 3.4% of industry credit card balances in Brazil and 2.5% in Mexico as of March 2026.
The analyst forecasted the credit card segment would generate an EBIT loss of $443 million in 2026, representing a 1.1 percentage point drag on consolidated margin, before reaching breakeven in 2028. BofA projected credit card EBIT of $1.5 billion by 2030, implying a 2.2 percentage point margin improvement from 2026 levels. Credit cards typically take 12 to 18 months to reach net interest margin after losses breakeven due to upfront provisioning requirements.
MercadoLibre launched its credit card in Argentina, where the company maintained 19.9 million daily active Pago app users compared to 12.9 million in Brazil as of April 2026. Aguilar stated the company’s stronger market position and lower customer acquisition costs in Argentina should support faster portfolio ramp-up as inflation declined in the country. The analyst noted credit penetration in Argentina remained low due to historical inflation and macroeconomic volatility.
Bank of America maintained its $2,400 price target on MercadoLibre based on a sum-of-the-parts valuation. The firm valued commerce contributions at 0.6 times 2027 gross merchandise value and fintech revenue streams at 0.2 times 2027 off-platform total payments value.
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