Citi opened a “downside 30-day catalyst watch” on MercadoLibre (MELI) while keeping a Buy rating on the shares with a $3,000 price target The company announced a reduction of its free shipping threshold to over 19 reais from over 79 reais previously, the analyst tells investors in a research note. The firm says the news also follow an earlier measure to reduce shipping fees charged to sellers. As a result, Citi expects potential earnings volatility for MercadoLibre, namely gross margin pressure in Brazil. It is “raising a yellow flag for the short-term.”
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