Wedbush cuts Instacart to Underperform on rising competition from Amazon

Investing.com -- Wedbush downgraded Maplebear Inc., the parent of Instacart (NASDAQ: CART), to Underperform from Neutral, saying Amazon’s push into same-day perishable grocery delivery has sharpened competition and will likely erode Instacart’s market share over time.

The brokerage set a $42 price target, down from $55, and trimmed its growth and profit estimates.

It now expects 2026 gross transaction value to rise 7.1% year-on-year, about 200 basis points lower than its earlier forecast, and adjusted EBITDA of $1.2 billion, or a 29.5% margin.

Instacart has posted solid transaction growth and stronger margins in recent quarters, easing some investor concerns, but Wedbush said Amazon’s expansion makes its Prime subscription more compelling for grocery shoppers.

That poses a direct challenge to Instacart, which has built its business by supporting regional and local grocers with limited delivery resources.

Instacart’s share of intermediary grocery delivery has already slipped, falling to about 58% in 2024 from 70% two years ago, according to Wedbush.

It added that large retail partners could push more orders to their own delivery services, weighing further on Instacart’s growth.

The brokerage also warned that Instacart may need to boost spending on incentives and marketing to defend its position, making long-term targets harder to reach.

Wedbush said this dynamic points to slower growth ahead, with gross transaction value rising only in the mid- to low-single digits in the later years of its forecast.

“We are increasingly cautious on management’s ability to achieve its longer-term targets as competitive pressures build,” Wedbush wrote.

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