Wedbush has upgraded Pinterest Inc (NYSE:PINS) to an ‘outperform’ rating from ‘neutral’ with a 12-month share price target of $38.
“We think the company is executing well against its user engagement and monetization strategies and remains on pace to deliver growth and profits in line with its multi-year guidance framework,” said analysts.
Wedbush highlighted Pinterest's partnerships with Amazon and Google, which have been critical in scaling third-party demand.
Additionally, the introduction of new ad surfaces and formats, as well as the adoption of lower-funnel ad tools, has improved conversion and provided advertisers with better visibility.
Expectations have been lowered further following 3Q results, and we believe the downside risk to results is limited from here,” said analysts, adding: “We think investors should take advantage of this period of relative weakness, given a more attractive risk/reward in our view for a platform with considerable monetization potential ahead.”
Pinterest’s recent enhancements to its search and recommendation engine have further deepened user engagement and optimized the platform’s shopping experience, they added.
Shares are currently trading at $29.82.