Instacart gains on upgrade, AutoNation started at Outperform: 4 big analyst picks

Investing.com — Here is your Pro Recap of the biggest analyst picks you may have missed today: upgrades at Instacart and Burlington Stores, and Buy initiations at AutoNation and Spirit AeroSystems.

Looking to build a market-betting portfolio for 2024? Join InvestingPro now and access the AI-powered strategy that outperformed the market by 670% over the last decade.

Instacart raised to Outperform

Instacart ( Maplebear Inc) (NASDAQ:CART) shares rose more than 2% pre-market today after Wolfe Research upgraded the company to Outperform from Peerperform with a price target of $35.00, as reported in real-time on InvestingPro.

The analysts noted that although the company's Gross Transaction Value (GTV) growth has slowed in recent quarters due to moderation in COVID tailwinds and short-term macroeconomic challenges like high inflation, there are prospects for improvement.

They acknowledged uncertainties in medium-term GTV growth due to increasing competition but believe that Instacart can enhance efficiencies in logistics and advertising to foster healthy revenue growth. Furthermore, the analysts anticipate an improvement in margins through fixed cost leverage over the coming years.

While acknowledging some long-term growth reservations, the analysts see no fundamental reasons for Instacart's stock to trade at such depressed levels, a situation usually reserved for businesses facing significant challenges.

AutoNation started at Outperform

Evercore ISI initiated coverage on AutoNation (NYSE:AN) with an Outperform rating and a price target of $185.00.

Evercore’s analysis highlighted AutoNation's evolution into a more mature business, characterized by less reliance on inorganic growth and higher returns on equity and assets.

The analysts also pointed out AutoNation's commitment to returning substantial capital to its shareholders, with the potential to buy back more than 75% of its current stock using free cash flow by the end of the decade.

Two more upgrades

Citi initiated coverage on Spirit Aerosystems (NYSE:SPR) with a Buy rating and a price target of $39.00.

The bank cited its “positive view on the aerospace cycle given large backlogs at the major OEMs” and “improved earnings visibility given a recent contract modification with Boeing (NYSE:BA) and the potential for a similar modification with Airbus.”

Piper Sandler upgraded Burlington Stores (NYSE:BURL) to Overweight from Neutral with a price target of $240.00 (from $155.00). Shares rose more than 1% pre-market today.

We are increasingly confident in the 300+ bps margin expansion opportunity and believe that market share gains are likely to continue. We believe department stores have remained highly conservative for 1H24 inventory buys, which creates a favorable environment for off-price to take continued share.

Take your investing game to the next level in 2024 with ProPicks

Institutions and billionaire investors worldwide are already well ahead of the game when it comes to AI-powered investing, extensively using, customizing, and developing it to bulk up their returns and minimize losses.

Now, InvestingPro users can do just the same from the comfort of their own homes with our new flagship AI-powered stock-picking tool: ProPicks.

With our six strategies, including the flagship "Tech Titans," which outperformed the market by a lofty 952% over the last decade, investors have the best selection of stocks in the market at the tip of their fingers every month.

Subscribe here for up to 50% off as part of our year-end sale and never miss a bull market again!