Tuesday, Raymond James initiated coverage on Instacart (NASDAQ:CART) with a Market Perform rating.
The firm highlighted the company's successful management and technological integrations with over 1,500 retail banners, which have led to more than 1 billion lifetime orders. Instacart's shoppers, supported by detailed store maps, contribute to the company's high order accuracy. This efficiency has helped Instacart secure over 70% market share in baskets valued above $75.
The firm also expressed optimism about Instacart's potential to grow its advertising business beyond the marketplace. This includes opportunities with Enterprise, Storefront, and Carrot ads, as well as a partnership with META (NASDAQ:META). Additionally, the possibility of expanding in-store through innovative eCarts, such as the Caper Shopping Cart, was noted as a positive development.
"But we have limited visibility into the adoption curves (e.g., sales GTM, in-store transformation) to achieve meaningful scale/fundamental upside, which informs our Market Perform rating," the analysts said.
Instacart's dominance in large basket orders and its strategic moves to enhance shopper experience and expand its advertising reach are central to its current market position. The company's integration of technology with legacy and customized point-of-sale systems has been a key factor in its ability to maintain a significant share of the market for high-value orders.
In other recent news, Instacart reported a Gross Transaction Value (GTV) of $8.2 billion and EBITDA of $208 million in recent developments. The company also repurchased $117 million worth of its shares from D1 Iconoclast Holdings LP. Cantor Fitzgerald initiated coverage on Instacart with an Overweight rating and a price target of $45.00, highlighting the company's strong position in the online grocery market. Meanwhile, the company expanded its Board of Directors and appointed Mary Beth Laughton, a seasoned leader with experience from Nike (NYSE:NKE) and Athleta LLC, as a Class I director.
Instacart has been forming strategic partnerships, integrating Ibotta's extensive catalog of digital coupons into its platform and expanding its collaboration with ALDI SOUTH Group. Analysts from BMO Capital Markets and Piper Sandler raised their price targets on Instacart's shares, citing the company's robust performance and growth potential. However, Wolfe Research initiated a Peerperform rating due to growth concerns, and KeyBanc Capital Markets maintained a Sector Weight rating.
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