Analyst Says Buy the Dip on This Argentinian Stock

J.P. Morgan Securities set a lofty price target for MELI stock

Aug 13, 2019 at 9:01 AM
facebook twitter linkedin


J.P. Morgan Securities upgraded Mercado Libre, Inc. (NASDAQ:MELI) to "overweight" from "neutral," and lifted its price target to $750 from $563 -- a 20% premium to last night's close at $623.65 -- saying the Argentinian online auction name has shown strength in an underpenetrated e-commerce area. The brokerage firm also cited an attractive entry point after MELI stock sold off yesterday on Argentina's shocking primary election results.

More specifically, MELI shares fell 9.6%, their biggest one-day drop since Dec. 24. However, the stock found support at its 80-day moving average -- a trendline that helped contain a pullback from earlier this month, and a subsequent bounce from here helped catapult Mercado Libre to a record high of $698.98 last Friday, Aug. 9. Today, the equity is up 2.2% in electronic trading.

There's room for more bull notes to come through on a stock that's more than doubled on a year-to-date basis. Prior to today, six of 12 brokerages maintained a tepid "hold" rating on MELI. Plus, the average 12-month price target of $662.80 represents expected upside of just 6.3% to last night's close.

A round of short covering could fuel a bigger bounce for MELI shares, too. Short interest jumped 11.7% in the latest reporting period to 1.88 million shares. This accounts for a healthy 4.6% of the stock's available float, and would take almost four days to cover, at the equity's average pace of trading.

 

Stop leaving money on the table with the same old broken options trading approach...

There is no options strategy that more perfectly capitalizes during earnings season better than this simple call and put buying strategy. Perfect for aggressive traders looking to recover their suffering portfolios so far in 2022. With the simplest possible options strategy, Schaeffer's team with 100+ years of options trading excellence, target 200% gains on every single trade. So many trades are being beaten down by the market, but don't be one of them! Don't waste another second... join us right now before the next trade is released! 

 
Schaeffer's Daily Bulletin Offer
 


 


 
Special Offers from Schaeffer's Trading Partners