Analyst Brian Pitz from BMO Capital maintained a Buy rating on Pinterest (PINS – Research Report) and increased the price target to $46.00 from $40.00.
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Brian Pitz has given his Buy rating due to a combination of factors that highlight Pinterest’s growth potential and strategic advancements. The company is witnessing an increase in Direct Response (DR) advertising budgets, driven by record engagement levels and effective lower-funnel ad solutions such as deep links and the upcoming Performance+ for Return on Ad Spend (ROAS), which is set to launch in the first quarter of 2025. This development is expected to unlock additional DR budget growth, enhancing Pinterest’s revenue prospects.
Furthermore, Pinterest is experiencing a surge in clicks and conversion rates, particularly through mobile deep linking and promotional ads, which saw significant year-over-year increases. The platform’s improvements in targeting and content delivery have contributed to an all-time high in weekly and monthly active users, boosting user engagement. These factors, coupled with the potential for increased revenue from emerging verticals like Finance and Travel, are key reasons for the Buy rating. The positive revenue guidance and the anticipated impact of Amazon Ads in 2024 further support the optimistic outlook.
In another report released today, TD Cowen also maintained a Buy rating on the stock with a $46.00 price target.