RIO DE JANEIRO, BRAZIL – Goldman Sachs estimates that Brazilian e-commerce as a whole should grow 31% in 2021, reaching R$201 (US$35) billion in gross sales (GMV) and implying a 13% penetration in the total retail market, up 1.95% year over year.
In absolute terms, MercadoLibre is projected to add R$3.4 billion in new GMV in Brazil in the third quarter, ahead of Americanas with R$2.3 billion, Magazine Luiza with R$1.6 billion, and Via with R$1.4 billion.
From 2021 to 2024, the bank expects e-commerce in Brazil to grow an average of 25% per year, taking the online share to 20.2% of total retail in 2024, from 11.1% in 2020.
The US bank expects payment volumes to gradually recover as economies in Latin America reopen but believes investors will also increasingly focus on loan portfolio sizing and credit quality.
After adjusting its “sum-of-the-parts” model and updating projections for the next few years, which involve a slowdown in e-commerce in Latin America, the bank cut its price target on MercadoLibre’s papers from $2,670 to $2,470. Despite this, the stock’s upside potential is 56%, and the bank reiterated its recommendation to buy the asset.