Why This Instacart Analyst Remains Bullish Even As Amazon, Uber, DoorDash Intensify Competition
Goldman Sachs analyst Eric Sheridan maintains a bullish outlook on Instacart (NASDAQ:CART), reiterating a Buy rating with a price target of $67 despite increased competition from Amazon, Uber, and DoorDash. Although CART stock has dropped 12% since September, Sheridan believes that partnerships with third-party marketplaces could drive incremental demand rather than cannibalizing Instacart's gross transaction value. At the time of publication, Instacart shares rose 1.31% to $38.81.
Instacart's (NASDAQ:CART) stock already reflects the intensifying competitive landscape in online grocery delivery, according to Goldman Sachs.
The Instacart Analyst: Analyst Eric Sheridan reiterated a Buy rating and price target of $67.
• CART stock is gaining positive traction. See what is driving the movement here.
The Instacart Thesis: The company's stock has declined by 12% since September, after a series of announcements including Amazon.com Inc's (NASDAQ:AMZN) expansion of its grocery offering, Uber Technologies Inc's (NYSE:UBER) partnerships in grocery and non-food retail, and DoorDash Inc's (NASDAQ:DASH) partnerships with Kroger Co (NYSE:KR) and Ace Hardware, Sheridan said in the note.
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The pressure on the share price indicates that investors already expect these announcements to result in "material cannibalization" of Instacart's gross transaction value (GTV) and EBITDA over the next six to 12 months, he added.
"We reach the opposite conclusion — we see a likely outcome that when one of CART’s grocery partners enters into a partnership with another third-party (3P) online marketplace, it can result in incremental demand for that grocer as opposed to cannibalizing CART GTV," the analyst wrote.
CART Price Action: Shares of Instacart had risen by 1.31% to $38.81 at the time of publication on Monday.
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