MercadoLibre (MELI.O) 3Q26 Preview: Some Sequential Improvement in Mg, but No Major Discrepancies vs. Consensus

MELI is set to report 3Q26 results on Nov. 4 after market close. We expect Brazil Commerce growth trends to remain broadly unchanged, at roughly 38% FX-neutral growth, despite a tougher comparison base. Meanwhile, Mexico and Argentina could see some moderation given the macro backdrop. We are more constructive on a sequential margin recovery supported by shipping fee adjustments implemented in late Aug. and lower provisions (net of recoveries) following Pago's participation in Brazil's consumer debt renegotiation program, Desenrola 2.0. While we believe investors will welcome a QoQ margin recovery, we remain on the sidelines. For 3Q26, we are slightly above consensus on revenue (+1%), driven by stronger Commerce and Fintech trends. Despite forecasting a gross margin ~30bps below consensus and somewhat higher Product & Technology expenses, our EBIT estimate remains broadly in line with Visible Alpha consensus. Excluding FX losses, our net income forecast is also broadly in line with con