Instacart initiated with a Buy at Benchmark

Benchmark analyst Mark Zgutowicz initiated coverage of Maplebear, the parent of Instacart, with a Buy rating and $32 price target. Despite the firm’s expectation for future digital grocery market share loss to competing intermediaries and traditional grocers, Benchmark argues that the stock’s current valuation underappreciates the company’s discounted free cash flow outlook and addressable market. The firm acknowledges the “considerable competitive headwinds yielding future market share loss,” but still sees Instacart as well-positioned to benefit from a secular expansion of digital grocery volumes, the analyst tells investors.