Investing.com -- Wells Fargo began coverage of Instacart ( Maplebear Inc.) (NASDAQ:CART) with an "equal weight" rating and a price target of $47 amid risks from competition and slower advertising growth.
Advertising growth is projected to slow, with risks to consensus forecasts due to plateauing ad loads and softer consumer packaged goods budgets.
The bank expects EBITDA estimates for fiscal 2025 and 2026 to fall 2% and 4% below consensus, pressured by rising customer acquisition costs and maturing ad revenue.
While optimistic about online grocery's 12% three-year CAGR, Wells Fargo (NYSE:WFC) sees challenges for Instacart in sustaining growth amid intensifying competition and increased marketing expenses.
The Uber (NYSE:UBER) partnership may add roughly $775 million in gross order value by 2026, but SNAP funding cuts could pose near-term headwinds.
Wells Fargo values Instacart at 11 times 2026 EBITDA estimates, projecting revenues of $3.95 billion and EBITDA of $1.11 billion for the year.
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