Goldman's Resilience: Standing Firm on a Beaten-Up IPO, Envisioning Over 75% Upside

Investing / Thursday, 09 November 2023 20:30

"Goldman Sachs Projects a Comeback for Instacart: Anticipates Over 76% Upside with a $48 Price Target"

Goldman Sachs is expressing confidence in the potential resurgence of Instacart, maintaining a buy rating on the grocery delivery company and setting a $48 per share price target. This forecast implies a remarkable 76% upside from the Wednesday closing price. Despite a roughly 13% dip since its IPO in September, which valued Instacart at $10 billion—significantly lower than its pandemic-era high of $39 billion—the company is showing signs of promise.

Instacart reported impressive figures, with adjusted EBITDA reaching $163 million, surpassing the StreetAccount estimate of $120.5 million. Additionally, the company's revenue of $764 million exceeded expectations. Goldman Sachs analyst Eric Sheridan remains optimistic about Instacart's long-term prospects, citing its positive exposure to two key growth themes: the ongoing digital transformation of the grocery industry and the increasing significance of retail media networks in the broader digital advertising landscape.

Sheridan emphasizes the potential benefits for Instacart, anticipating continued growth through greater adoption of its platform and enhanced advertising revenue. While acknowledging short-term considerations such as consumer demand, competitive dynamics, industry shifts, and the impact of stock buyback authorizations, Sheridan remains steadfast in his positive outlook for Instacart.

As investors navigate the evolving landscape of the grocery and delivery sectors, Goldman Sachs sees Instacart as a compelling opportunity poised for a significant comeback, emphasizing its resilience and potential for robust growth. CNBC's Michael Bloom contributed to this insightful report.

"In conclusion, Goldman Sachs' unwavering confidence in Instacart's potential resurgence is underscored by their maintained buy rating and a $48 per share price target, projecting an impressive 76% upside. Despite a post-IPO decline and a valuation below its pandemic-era peak, Instacart's recent performance, with robust figures in adjusted EBITDA and revenue, has fueled optimism. Analyst Eric Sheridan's positive outlook hinges on Instacart's alignment with key growth themes in the grocery and digital advertising sectors. As the company navigates short-term considerations, the broader narrative emphasizes its resilience and positioning for long-term success. Instacart, according to Goldman Sachs, stands as a compelling opportunity in the evolving landscape of digital grocery and delivery services."