Macquarie has maintained its Outperform rating on Instacart (NASDAQ: NASDAQ:CART) and increased the price target to $50.00 from the previous $45.00.
The adjustment follows Instacart's expansion of its retail media advertising strategy, which is expected to reaccelerate the company's advertising growth.
The firm highlighted the potential benefits of Instacart's partnership with Uber (NYSE:UBER), estimating it could contribute approximately 4% to Instacart's 2025 Gross Transaction Value (GTV) growth. Additionally, the firm provided insights into Amazon (NASDAQ:AMZN)'s latest advancements in grocery delivery.
In the statement released by Macquarie, the analyst cited, "Instacart further extends its retail media advertising strategy to reaccelerate advertising growth. We think the company's Uber partnership can add ~4% to its '25 GTV growth. We detail Amazon's latest grocery delivery progress. We reiterate our Outperform rating and raise our TP from $45.00 to $50.00."
In other recent news, Instacart and Foodsmart's joint Foodcare program, which integrates telenutrition services with grocery delivery, has shown improved health outcomes for individuals with obesity and diabetes.
Also, Instacart reported a Gross Transaction Value (GTV) of $8.2 billion and an EBITDA of $208 million, while repurchasing $117 million worth of its shares from D1 Iconoclast Holdings LP. The company has also formed a strategic partnership with Family Dollar, allowing customers to use the Supplemental Nutrition Assistance Program (SNAP) Electronic Benefit Transfer (EBT) for online orders.
In analyst coverage, Jefferies initiated a Hold rating on Instacart, while Morgan Stanley cut the company's price target from $45.00 to $41.00. Raymond James initiated coverage with a Market Perform rating, and Cantor Fitzgerald started coverage with an Overweight rating and a price target of $45.00.
InvestingPro Insights
Instacart's (NASDAQ:CART) strategic initiatives align well with its current financial position and market performance. According to InvestingPro data, the company has shown impressive revenue growth, with a 10.69% increase over the last twelve months as of Q2 2024, and a notable 14.94% quarterly growth in Q2 2024. This growth trajectory supports Macquarie's optimistic outlook on the company's potential.
InvestingPro Tips highlight that Instacart holds more cash than debt on its balance sheet, indicating a strong financial position to support its expansion plans and partnerships. Additionally, the company's gross profit margin stands at an impressive 74.95%, reflecting efficient operations and potential for profitability as it scales.
The market seems to be recognizing Instacart's potential, with the stock showing a strong return of 72.76% over the past year. This performance aligns with the analyst's bullish stance and increased price target. For investors seeking more comprehensive insights, InvestingPro offers 11 additional tips for Instacart, providing a deeper understanding of the company's financial health and market position.
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