BMO Capital Markets is moving off the sidelines when it comes to Maplebear . The bank upgraded the parent company of grocery delivery provider Instacart to outperform from market perform. Analyst Brian Pitz maintained his target price of $58, implying that shares could rally more than 55% from Monday's close. Shares of Maplebear have slipped 10% this year, opening up an attractive risk-reward ratio for investors, Pitz said. CART YTD mountain CART YTD chart "At current levels, the stock trades at ~7.4x EV/EBITDA (1.3SD below 2-year avg) and ~17.1x P/E (1.9SD below 1-year avg), a discount to historical avg, despite being the best-in-class grocery delivery player with [average order value] far superior to its competitors," he wrote. BMO's upgrade comes after Maplebear reported third-quarter GAAP earnings and revenue that topped analysts' estimates. Pitz pointed to Maplebear's fourth-quarter adjusted EBITDA and gross transaction value guidance, both slightly above expectations as drivers for his upgrade. The company's $1.5 billion increase to its share buyback plan is also attractive, he added. Pitz also applauded Maplebear's enterprise platform, which remains a key differentiator versus competitors, alongside its advertising business, which he said generates more than $1 billion in annualized revenue. He also praised Maplebear's fundamental marketplace strength. "The core grocery marketplace remains healthy and continues to grow, driven by a loyal (and growing) customer base with increasing order frequency and improving retention," he wrote. "Technology improvements are driving better unit economics across all basket sizes, as growing scale drives efficiencies that support reinvestment."
