It might not sound like much, but 20% upside is a big deal. When Wall Street analysts set price targets for stocks, they're thinking about a roughly one-year time frame. For perspective, the S&P 500 goes up about 10% per year on average.
If your $10,000 investment grows at a 10% compound annual growth rate (CAGR), you'll have over $16,000 in five years. But if your investment grows at a 20% rate, you'll have nearly $25,000 -- that's a huge difference. And on that note, Latin America's MercadoLibre ( MELI -1.
07% ) and cosmetics chain Ulta Beauty ( ULTA 1.53% ) are two stocks with greater than 20% upside ahead, according to select Wall Street analysts. Here's what investors should know.
1. MercadoLibre According to TipRanks, 12 analysts recommend buying MercadoLibre stock and two recommend holding. But the average price target is over $1,900 per share, which implies 20% upside from where it trades as of this writing.
This business is doing some exciting things that are creating value for its shareholders. MercadoLibre has one of the biggest e-commerce platforms in Latin America and has an impressive logistics network that helps it take market share. For perspective, the company has processed merchandise sales volume of nearly $47 billion over the last year -- that's big.
However, MercadoLibre's platform could get much bigger thanks to ongoing e-commerce adoption in the region. As an example, almost 70% of Brazilians use e-commerce today according to Statista, which isn't bad. B.
