Instacart stock dips as NYC approves minimum pay for grocery delivery workers

Investing.com - Instacart (NASDAQ:CART) stock fell slightly to $45.93 after the New York City Council voted Wednesday to establish minimum pay thresholds for grocery delivery workers, with implementation set for January 2026. The company maintains robust financials with an impressive 74.84% gross profit margin and a strong balance sheet showing more cash than debt.

Bernstein SocGen Group maintained its Outperform rating on Instacart with a $63.00 price target despite the regulatory development, which creates new cost pressures for the grocery delivery platform. According to InvestingPro data, the company’s overall financial health score is rated as "GREAT," with 8 additional key insights available to subscribers.

The research firm believes the framework for calculating pay and other requirements will likely mirror the 2023 ruling that affected restaurant food delivery services, creating a manageable challenge for Instacart through operational efficiencies and consumer fees.

Bernstein expects Instacart will pass excess costs to consumers, presenting a "modest risk to growth in NYC more than unit economics" according to their analysis of the situation.

The firm pointed to DoorDash and Uber as reference points, noting both companies successfully navigated similar rules implemented in 2024 without significant negative impacts to their businesses.

In other recent news, Instacart has reported better-than-expected growth, driven by increased order volumes, according to Bernstein SocGen Group. Following this earnings report, the firm raised its price target for Instacart to $63.00, maintaining an Outperform rating. Morgan Stanley also highlighted Instacart’s consistent performance, noting that the company exceeded the high end of its gross transaction value guidance in five of seven quarters since its IPO. They maintained an Equalweight rating on the stock with a price target of $48.00, citing steady execution despite competitive pressures.

Cantor Fitzgerald reiterated its Overweight rating with a $63.00 price target, acknowledging potential risks from Amazon’s grocery expansion but emphasizing Instacart’s favorable supplier relationships. Citizens JMP also maintained a positive outlook, reiterating a Market Outperform rating with a $60.00 price target, pointing to key growth categories for the company. In a strategic move, Instacart appointed Josh Silverman, CEO of Etsy, to its Board of Directors, bringing significant marketplace and technology leadership experience. Silverman’s background includes executive roles at American Express, Skype, and eBay, as well as co-founding Evite.

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