We Hold Mixed Views of Brazil's Election Results; Sternest Test to Come Oct. 30

We maintain our $1,400 fair value estimate and Very High Uncertainty Rating for wide-moat MercadoLibre as we digest results from Brazil's first round of presidential elections on Oct. 2. It's difficult to overstate the importance of the largest country in Latin America to MercadoLibre's growth plans, with 56% of the company's revenue in that market as of second-quarter earnings. We view political risk, particularly concerning the peaceful transition of power and preservation of functioning democracy, as one of the larger overhangs on the firm's shares, which continue to trade at a sizable discount—about 40%—to our fair value estimate.