Instacart initiated with a Peer Perform at Wolfe Research

Wolfe Research initiated coverage of Instacart (CART) with a Peer Perform rating and $24-$42 fair value range. While the firm likes Instacart’s competitive position in online grocery and attractive profit margins, lack of conviction on growth re-acceleration and growing competition keeps Wolfe on the sidelines. The firm argues that growth has decelerated steadily over last few quarters, and it currently expects GTV growth to remain near mid-single-digit range over medium-term. Given this dynamic, Wolfe thinks Instacart should trade at a discount to Uber (UBER) and DoorDash (DASH) that are growing faster, but at a premium to Lyft (LYFT).