Why MercadoLibre, Inc. Shares Popped Today

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of MercadoLibre,  (NASDAQ: MELI  ) jumped more than 10% early Thursday, then settled to close up around 7% thanks to an upgrade from analysts at JPMorgan.

So what: Shares of the Latin American e-commerce specialist have traded relatively flat during the past few weeks since it reported mixed-quarterly results, with which it fell short on revenue, but easily beat analysts' expectations for earnings.

JPMorgan, for its part, upgraded MercadoLibre to overweight today -- while at the same time curiously lowering its per-share price target to $104 from $114. It cited both its solid forward earnings potential, and overblown worries of Venezuelan currency devaluation, the latter of which it believes is likely already priced into the stock.

Now what: Shares don't look terribly expensive at 28 times next year's estimated earnings, and I think that's a reasonable premium to pay as long as the budding e-commerce giant can maintain its earnings growth momentum going forward. For now, while I'll be keeping a close eye on MercadoLibre's progress, I still like the stock over the long term.

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