The decline in advertising spending has harmed the equities of social media companies. Still, the analysts at Piper Sandler feel that Pinterest stock can make a comeback.
On Tuesday, Thomas Champion and his colleagues raised their rating on Pinterest (NYSE:PINS) from Neutral to Overweight and increased their price objective for the stock from $25 to $30. Their current price target is 27% higher than what Pinterest stock price was on Monday.
After the market opened on Tuesday, shares of Pinterest climbed by 7% to a new high of $25.23.
According to Champion, who expects “several tailwinds” in 2023, there is a good chance that the stock of the photo-sharing platform will continue to increase.
The analyst stated that Pinterest’s share in the ad industry has the potential to increase, citing his latest study of ad buyers, which revealed that the firm will make up 8% of social budgets in 2023, an increase from approximately 5% of social budgets last year. Champion attributes a portion of Twitter’s loss of many advertisers and enhancements made by Pinterest to enable customers to better target their advertisements to the fact that Pinterest has gained popularity.
Champion also referred to the firm’s most recent earnings report, which indicated that Pinterest added about three million monthly active users in North America during the third quarter as compared to the second quarter. According to the monthly data collected by Piper Sandler, the trend appears to have carried over into the fourth quarter: the number of monthly active users in the United States increased by more than 5% in November compared to the same month a year ago, which was on par with October but higher than September.
In conclusion, Champion refers to Wall Street estimates that are within reach. The majority of analysts whose forecasts are tracked by FactSet anticipate revenue growth of approximately 15% between 2022 and 2023. According to the analyst, this is “much less than the approximately 50 percent or more rise witnessed in the past.” We consider this a low threshold, and PINS is positioned to exceed this increase in the coming year.
However, only 39% of Wall Street analysts have a bullish rating on Champion’s stock, indicating that they believe the company will continue to do well. The slowdown in the economy, which has caused brands to reduce their ad expenditure, has been the main concern that has been battering the company, which has fallen by 35% so far this year. In addition, some investors are holding off on making investments as they see the new CEO, Bill Ready, who took over in June, demonstrate his worth.
Pinterest Stock Went Up
Following Piper Sandler’s upgrade of Pinterest from neutral to overweight, shares of the social media business surged by nine percent. The increase was based on the positive perspective that marketers have of Pinterest, as well as the possibility of a stock buyback, according to analyst Thomas Champion.
Featured Image – Pexels © Brett Jordan
Author Valerie Remorosa 
