Magazine Luiza (MGLU3) or Mercado Livre (MELI34)? One will be highlighted in 4Q22, according to BBA

Mercado Livre should have a profit of US$ 106 million in 4Q22, while Magazine Luiza may have a loss of R$ 72 million, according to the BBA (Image: Freepik/@snowing)

O Free market (MELI34) should increasingly leverage its monetization platform in e-commerce, being the main highlight of the segment in the fourth quarter of 2022 (4Q22), evaluates the Itaú BBA.

According to a report signed by Thiago Macruz and the bank’s team of analysts, the Argentine online retail platform should outperform its competitor Magazine Luiza (MGLU3), which should present sequentially better numbers and a favorable cash flow generation dynamics in the period.

In the segment of e-commerceBBA analysts expect the Free market continue to outperform its peers in 4Q22, with a 19% growth in GMV (gross volume of goods) compared to the same period of the previous year.

As for the company’s revenue, experts estimate that it will be boosted by the ad and credit divisions, and estimate that the value will reach US$ 3 billion, up 41% in the annual comparison.

“This will probably also imply a solid expansion of the gross margin, to 46.8%”, points out the BBA report.

Analysts expect net income of $106 million for the Free market in 4Q22.

Magazine Luiza’s GMV should also surf in the positive moment. The report points to a growth of 12% compared to the previous year. In addition, analysts calculate a growth of 10.6% in SSS (Same Store Sales).

However, financial expenses “will probably offset most of these gains”, assess BBA specialists. They calculate another quarter of net loss, with losses of R$ 72 million.


Source: Moneytimes

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