Instacart initiated with an Equal Weight at Morgan Stanley

Morgan Stanley initiated coverage of Instacart with an Equal Weight rating and $28 price target. The analyst sees attractive upside potential in the $1.8 trillion U.S. grocery market but says the highly competitive nature of the business and recent behavior by peers raises concerns on Instacart’s forward growth as well as market-share loss. Despite the company’s large total addressable market and advertising mix shift, the combination of competitive intensity, cohort behavior and low core transaction profitability keeps the the firm on the sidelines, the analyst tells investors in a research note.