Guggenheim initiates Instacart stock coverage with Neutral rating

Investing.com - Guggenheim initiated coverage on Instacart (NASDAQ:CART) with a Neutral rating and a $40.00 price target on Wednesday. According to InvestingPro data, the company maintains impressive gross profit margins of nearly 75% and a strong financial health score.

The research firm cited slower anticipated growth compared to Instacart’s gig-economy peers, elevated disintermediation and competitive pressures, and an unproven management team as reasons for its cautious stance. Guggenheim noted that Instacart has a relatively new leadership team, with its CEO joining in August 2025 and CFO in May 2024.

Guggenheim acknowledged that competitive pressures from Amazon, DoorDash, and Uber Eats are reflected in Instacart’s recent share underperformance, with the stock down 19% since August 1, compared to the S&P 500’s 5% gain during the same period.

The firm identified potential growth drivers for Instacart, including its advertising business and Instacart+ subscription service. Guggenheim expects advertising revenue growth to reaccelerate in 2026 as tariff-related consumer packaged goods headwinds diminish and 2025 partnerships become more meaningful contributors.

Guggenheim’s $40 price target is based on 11x its 2027 EV/OIBDA forecast, representing approximately a 20% discount to the current S&P 500 trading multiple, reflecting slowing top-line growth and terminal value risk.

In other recent news, Instacart announced a new integration with TikTok, allowing select consumer packaged goods advertisers to use Instacart’s retail data for targeted advertising and performance measurement directly within TikTok Ads Manager. This makes Instacart the first retail media network to offer such end-to-end capabilities on TikTok. Additionally, Instacart has partnered with United Airlines to provide MileagePlus members with grocery delivery perks, including waived delivery fees on qualifying orders for a limited time.

On the analyst front, Piper Sandler downgraded Instacart’s stock from Overweight to Neutral, citing competitive pressures in the grocery delivery market. Meanwhile, Cantor Fitzgerald reiterated an Overweight rating, emphasizing Instacart’s strategic value and potential for acquisition, possibly by a company like Uber. Mizuho Financial Group also initiated coverage with a Neutral rating, pointing out competition as a significant concern despite Instacart’s solid recent performance. These developments provide a multifaceted view of Instacart’s current market position and strategic initiatives.

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