Benchmark lowers target, holds Buy
Benchmark on Tuesday cut its price target for Instacart (NASDAQ:CART) to $53.00 from $60.00, while leaving its Buy rating intact. The move comes days ahead of Instacart’s fourth-quarter earnings, which are set for February 12. At publication, the shares were trading at $35.21, down 31.36% over the past six months and hovering near a 52-week low of $34.15.
Conservative 2026 assumptions drive the revision
The research house said the new target reflects intentionally conservative forecasts for 2026. Benchmark projects total revenue growth of 6.5% year-over-year in 2026, versus an estimated 10.1% increase in 2025. That 6.5% outlook is below Instacart’s recent topline pace, with the company recording 10.16% revenue growth over the last twelve months.
On profitability, Benchmark models 150 basis points of adjusted EBITDA leverage in 2026 compared with an estimated 280 basis points of leverage in 2025. The firm’s forward-looking scenario produces a DCF-based valuation that supports the lowered price target.
Valuation and market context
Benchmark pointed to current trading multiples as part of its rationale. The firm estimated that 2026 implied enterprise value to revenue and to adjusted EBITDA multiples sit at roughly 2.1x and 6.3x, respectively, against a last-twelve-months average of 2.5x/8.4x. According to InvestingPro data cited by the research note, the shares appear inexpensive on some metrics, including a P/E ratio of 22.29 and gross profit margins of 74.46%.
Benchmark’s 2026-2028 compound annual growth rate assumptions are 5.4% for revenue and 7.9% for adjusted EBITDA. The firm also projects 2030 adjusted EBITDA at 3.1% of gross transaction value (GTV), lower than Instacart’s long-term guidance range of 4% to 5%, a difference that contributes to the revised target.
Industry signals and operational updates
Despite Benchmark’s cautious company forecasts, the firm noted improving industry fundamentals. Data from Brick Meets Click cited in the note showed that U.S. digital grocery spending accelerated sequentially in the fourth quarter on a two-year stack by 440 basis points quarter-over-quarter.
Operationally, Instacart has continued to announce commercial partnerships and geographic expansion. The company and Toast have entered a strategic relationship to help retailers and restaurants in the U.S. by enabling Toast’s retail customers to synchronize inventory with the Instacart Marketplace, which could broaden merchants’ digital distribution. Instacart also struck a nationwide floral partnership with 1-800-Flowers.com to enable on-demand delivery from more than 700 florist locations.
International growth efforts include an expanded partnership with Costco to launch same-day delivery services in France and Spain, marking Instacart’s first operations in those two markets. The initiative allows Costco members in those countries to place orders online for same-day delivery through dedicated websites.
Other corporate activity mentioned in the note
Separately, the research note referenced a binding letter of intent in which Limitless X Holdings agreed to buy a majority stake in Ding Easy AI. Under the terms, Limitless X Holdings would acquire 60% of Ding Easy AI’s equity interests for $15 million, with the consideration to be paid in Limitless X Holdings common stock.
What this means for investors
Benchmark’s downgrade of the target price, balanced with a maintained Buy rating, signals that the firm sees upside potential at current levels but is assigning more conservative medium-term growth and margin assumptions. The research note indicates that some of the risk from potential slowdowns in GTV or revenue growth may already be reflected in current multiples. Investors should watch the upcoming fourth-quarter earnings for how closely the company’s results and guidance align with Benchmark’s assumptions.
Note: This article includes a summary of Benchmark’s published estimates and public partnership announcements described in the referenced research note. It does not add new company guidance or financial figures beyond those reported by the research firm.