Stifel trims Instacart price target, says recent reaction ‘overdone’

Stifel analyst Mark Kelley lowered the firm’s price target on Instacart (CART) to $56 from $64 and keeps a Buy rating on the shares. Shares have fallen 18% since August 11 and underperformed the market since that time, which the analyst attributes to Amazon’s (AMZN) announcement that it will start offering grocery delivery for free to Prime members in select U.S. markets paired with New York City closing the minimum wage loophole, which will likely add some headwinds to Instacart revenue. However, while the firm has adjusted its estimates to reflect its current thinking on these key concerns, it ultimately arrives at the conclusion that the recent reaction is “overdone” and would be buyers of Instacart at current levels, the analyst tells investors.