Pinterest, the Communication Services sector company, was revisited by a Wall Street analyst today. Analyst Ronald Josey from Citi maintained a Buy rating on the stock and has a $44.00 price target.
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Ronald Josey has given his Buy rating due to a combination of factors that indicate strong potential for Pinterest’s growth. Firstly, Pinterest is expected to show better-than-anticipated results in terms of usage, revenue, and EBITDA, driven by expanding use cases and innovative advertising products like Performance+. The company is also benefiting from favorable comparisons as it overcomes previous challenges in food and beverage sectors and broadens its focus beyond retail and e-commerce.
Another reason for the Buy rating is the engagement momentum, particularly among Gen Z users who now make up a significant portion of Pinterest’s monthly active users. Additionally, Pinterest is making strides in capturing a larger share of always-on performance budgets, which are crucial for revenue. The adoption of new ad products and strategic partnerships further supports this growth trajectory. Moreover, Pinterest is expected to see margin expansion, aided by productivity gains from AI and strategic investments, which positions the company well for future profitability.
In another report released on July 20, Morgan Stanley also upgraded the stock to a Buy with a $45.00 price target.