Key Takeaways
- A fund that manages $35.8 billion made its three biggest second-quarter adds to MercadoLibre, Danaher and S&P Global.
- Danaher and S&P Global are up 23% and 18% since June 30, and MercadoLibre is up 3%.
- MercadoLibre has 31% upside to analysts’ average target, but its operating margin slipped to 6.3% in the third quarter.
- Danaher looks like the best buy of the three, as the only one with a higher average analyst target than a year ago.
Eagle Capital Management, a fund that manages $35.8 billion, made its three biggest adds of the second quarter to MercadoLibre (MELI), Danaher (DHR) and S&P Global (SPGI), according to its 13F for the quarter ended June 30, filed Aug. 14.
That filing is still its latest. Since June, two of the three have climbed hard, and over the past year analysts have raised their average target on just one of them.
MercadoLibre is the biggest bet of the three
The fund raised its MercadoLibre stake 79% in the second quarter, to 1.41 million shares worth $2.39 billion at June 30. That’s 7.3% of its 13F stocks and its No. 3 position, and the stock is up 3% since.
MercadoLibre reported its third quarter on Nov. 4, and it was more of the same. Revenue rose 45% to $10.75 billion. But operating income fell 6% to $676 million, and the operating margin slipped to 6.3%, from 6.7% in the second quarter and 9.8% a year earlier. The company said the drop came from more free shipping, new fulfillment capacity ahead of its peak season and “a tactical decision to increase affiliate marketing spend in Brazil.”
The bulls were counting on profit growth, and they didn’t get it. Analysts have been lowering their sights all year, too. Their consensus target is down 21% over the past year, to $2,272 from $2,877:
That target is still 31% above the stock. And at 42x forward earnings, MercadoLibre trades below the 48x it has averaged at quarter-ends since 2023.
TIKR tracks 26 analysts on MercadoLibre. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on MercadoLibre, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See MercadoLibre’s Analyst Ratings
Danaher has already moved
Danaher is a different kind of bet, and it has moved faster. The fund raised its stake 42% in the second quarter, to 9.36 million shares worth $1.78 billion at June 30. That’s 5.4% of its 13F stocks and its No. 6 position. The stock is up 23% since.
In October, Danaher reported a third-quarter beat, with trends improving across its end markets, and the stock rose 4% on the day. Analysts have come along. Their consensus target is back to $260, above the $254 of a year ago, after a dip to $228 in July:
The stock is 3% below its 52-week high, and that target is 11% above its last close.
S&P Global got the biggest increase
Like Danaher, S&P Global has climbed since June, but analysts are less sure of this one. The fund raised its share count 185% in the second quarter, to 4.07 million shares worth $1.66 billion at June 30. That’s 5.1% of its 13F stocks and its No. 7 position, and the stock is up 18% since.
The consensus target has gone the other way. It’s down to $525 from $612 a year ago, after a high of $622 in January and a low of $463 in July:
That’s 9% above the stock, which is still 13% below its 52-week high.
I’d buy Danaher first
If I had to pick one of the three right now, it’d be Danaher. It’s the only one with a higher average analyst target than a year ago, and its latest quarter beat.
MercadoLibre has the most upside on paper. But analysts expect its EPS to jump 46.5% in 2027, and a 6.3% margin is no start on that rebound. Plus, after Lula’s surprise re-election, a weaker real could shrink what its Brazilian sales are worth in dollars. And analysts are still more cautious on S&P Global than they were a year ago.
The catch with Danaher is the price: after its rally, it has less upside left than MercadoLibre.
The fund’s 13F for the quarter ended Sept. 30 is due by Nov. 16. It’ll show us whether the fund kept building its MercadoLibre stake, or held on to Danaher and S&P Global after their gains.
So what is MercadoLibre stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what MercadoLibre could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
