On Friday, Wells Fargo (NYSE:WFC) began coverage on Instacart shares (NASDAQ:CART), assigning an Equal Weight rating and setting a price target of $47.00. The company, currently trading at $44.82, boasts impressive gross profit margins of 75.4% and maintains a GREAT financial health score according to InvestingPro.
Wells Fargo's revenue forecasts for Instacart for fiscal years 2025 and 2026 are slightly below the consensus, with predictions of $3,662 million and $3,949 million respectively. This represents a modest 1% and 2% deviation below the average market expectations, primarily due to lower anticipated advertising revenue.
In terms of earnings before interest, taxes, depreciation, and amortization (EBITDA), Wells Fargo expects Instacart to achieve $982 million in FY25 and $1,105 million in FY26. These figures are 2% and 4% below the consensus, respectively.
The firm's price target of $47 is based on an 11 times multiple of their estimated 2026 EBITDA for Instacart. Wells Fargo's initiation of coverage and their analysis provide a new data point for investors monitoring the performance and valuation of Instacart stock.
In terms of financial performance, Instacart has exceeded expectations in its third-quarter results, leading to multiple price target revisions from financial firms such as Piper Sandler and Stifel. The company's Gross Transaction (JO:TCPJ) Value (GTV), revenue, and EBITDA have all surpassed projections. Furthermore, Instacart has expanded its share buyback plan and announced strategic partnerships with Family Dollar and Foodsmart, reflecting the company's current financial strategies and market activities.
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