MercadoLibre: We Expect Limited Valuation Impact From Milei Election Win for Marketplace Operator

We expect limited valuation impact from the election of libertarian president Javier Milei in Argentina for wide-moat MercadoLibre, with dollarization striking us as unlikely and with currency weakness already impacting our $1,330 fair value estimate through foreign exchange losses and a higher risk premium for the firm's Argentine operations. While Argentine markets are closed Nov. 20, U.S.-listed ETF ARGT is up 11%-12% on the news as traders digest results. MercadoLibre shares are up by a smaller amount (1%-2%) but have rallied by more than 20% in the election run-up over the past three months and look slightly overvalued.