Pinterest Inc. is on the cusp of “an inflection point” as digital advertising spending stabilizes, according to an analyst at Evercore ISI, who upgraded the stock to outperform for the first time in two years and set a new Street-high price target.
(Bloomberg) — Pinterest Inc. is on the cusp of “an inflection point” as digital advertising spending stabilizes, according to an analyst at Evercore ISI, who upgraded the stock to outperform for the first time in two years and set a new Street-high price target.
Signs of an end to a global pullback in marketing spending make for a brighter outlook for the pinboard-style social media company, and have the potential to fuel double-digit Ebitda growth, Mark Mahaney wrote in a note.
The analyst also highlighted early evidence of operational improvements under the leadership of Chief Executive Officer Bill Ready, who’s been in the job for just over a year.
Mahaney sees “a distinct probability” of “material revenue growth acceleration and substantial margin expansion” over the next two to four quarters.
Pinterest shares have trailed this year’s gains in social media peers such as Snap Inc. and Meta Platforms Inc., rising just 20% after the firm reported a deeper-than-expected loss earlier due to restructuring costs from layoffs and office closures. Mahaney’s raised price target of $41 sees the stock rallying more than 40% over the next 12 months as the backdrop improves. It gained 3.4% in premarket trading Tuesday.
Elsewhere, KeyBanc Capital Markets analyst Justin Patterson also sees improvements in the digital advertising market. He too raised his price target on Pinterest, to $35 from $32, based on accelerating growth, margin expansion and the potential for a ramped up partnership with Amazon.com Inc and others.
–With assistance from Subrat Patnaik.
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