Pinterest (PINS, Financial) shares rose after JPMorgan analysts upgraded the stock's rating and raised its target price. The rating was elevated from "neutral" to "overweight," with the price target increased from $35 to $40. Analysts noted improvements in Pinterest's user base and advertising technology, which are expected to drive revenue growth.
Following the upgrade, Pinterest's stock climbed 3.1% in early trading. This aligns JPMorgan's outlook with most other analysts covering the stock, as 16 analysts rate it as a "buy" and only 4 as a "hold," with an average target price of $39.75. Despite Pinterest's year-to-date gains, the stock remains about 18% below its February peak, while the S&P 500 has almost returned to its historical high from February.
Analysts highlighted Pinterest's strategy to leverage its full-funnel advertising approach and automation/AI capabilities, such as Performance+ tools, to capture a larger share of ad spending from advertisers with annual revenues between $1 billion and $30 billion. Larger advertisers are allocating 5% to 10% of their budgets to Pinterest.
The platform's monthly active users (MAU) are growing, with 85% accessing Pinterest via mobile apps, which generate about 90% of its revenue. This reduces Pinterest's exposure to disruptions in Google and search.
