Pinterest Stock Climbs as Upgrades Follow Investor Day

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Pinterest

Stocks were higher on Wednesday as analysts boosted the stock in response to positive comments on Investor Day.

On Tuesday, the social media company offered business updates and outlined its long-term prospects following a challenging period for the ad market and operational changes since CEO Bill Reidy joined the group.

The presentation told investors that the company has returned to monthly active user growth, with improved engagement and growing ad impressions over the past year. Pinterest said it expects to grow its revenue in the mid- to high-teens and improve earnings before interest, taxes, depreciation and amortization and chargeback margins to the low 30% range over the next three to five years.

Management had forecast third-quarter revenue to grow by a high single-digit percentage year over year. Chief Financial Officer Julia Donnelly said Pinterest now expects revenue to come in at the high end of this range.

DA Davidson analyst Tom Forte upgraded his rating on Pinterest to buy from neutral and in turn raised his price target from $25 to $35.

“Our update is a reflection of our confidence in management’s ability to achieve those financial targets: increasing platform presence, improving monetization not only in the US/Canada region, but also in Europe and the rest of the world geographies, as well as maintaining financial discipline.” (When it comes to investing while maintaining high margins),” Forte said in a research note.

Citi analyst Ronald Jose upgraded Pinterest shares from neutral to buy and raised his price target to $36 from $31.

“We simply believe that product investments over the past year are improving the user experience and we’re seeing more relevance and personalization of the content on the platform,” Josey said.

Pinterest is one of several social media platforms that have been hurt by the shrinking ad market over the past year. But there were signs of life in the ad business, which is a strong sign for Pinterest.

“The digital advertising market is huge and our opportunity is as big as ever,” Reddy said. “We have less than 1% penetration in the international and UCAN markets and we are confident that we will continue our long-term growth record.”

Shares of Pinterest rose 5.4% to $27.62 early Wednesday. The stock has gained 14% this year.

Write to Angela Palumbo at [email protected]