Here’s what Wall Street experts are saying about Pinterest ahead of earnings

Pinterest (PINS) is scheduled to report results of its second quarter after the market close on Tuesday, August 1, with a conference call scheduled for 4:30 pm EDT. What to watch for:

DIGITAL AD GROWTH ESTIMATES REVISED: Stifel raised the firm’s price target on Pinterest to $25 from $22 and keeps a Hold rating on the shares. Ahead of the company’s upcoming earnings report, the firm is “slightly” revising higher its digital advertising growth forecasts for 2023 and 2024, though it is only expecting “slightly better results” for ad-based names relative to the top-line outperformance witnessed in Q1, the analyst tells investors in a group preview note.

‘CLEAR EVIDENCE’ OF STABILIZING AD SPEND: On July 17, Evercore ISI upgraded Pinterest to Outperform from In Line with a $41 price target. The firm cites four reasons behind the upgrade; what it sees as “clear evidence” of digital ad spend stabilizing; increasing evidence that the operational improvements new CEO Bill Ready has implemented at the company over the past year are bearing fruit; its belief the first two reasons are combining to create “something of a fundamental inflection point”; and a current valuation it calls “reasonable for a company with the potential to generate sustained 30%+ EBITDA growth.”

AMAZON PARTNERSHIP LIVE EARLY: RBC Capital said in early July thatthe firm found ads on the Pinterest mobile app that suggest the Amazon (AMZN) partnership was currently live, which the firm believes is “somewhat earlier than expected.” The integration and economics are unclear today, says RBC, which adds that it expects the company will provide more details at its anticipated analyst day in September.

SPOT CHECKS: Loop Capital said on July 17 that spot checks show Amazon-sponsored ads appearing in query results in several categories on Pinterest, which points to a moderate early-entry/testing period with potential to ramp faster than expected.

PARTNERSHIP TO ALLOW ABOVE-CONSENSUS GROWTH: Wells Fargo upgraded Pinterest in June to Overweight from Equal Weight with a price target of $34, up from $23. The analyst says the company’s Amazon partnership going live, improving engagement trends and higher advertising load will allow Pinterest to deliver “accelerating and above-consensus” revenue growth. The firm sees a “strong catalyst path” for the shares over the 12 months. Wells expects Pinterest’s Q3 revenue guidance accelerating to low double digits versus 7% year-over-year in Q2 on impression growth accelerating, improving end-market trends and “Premiere Spotlight.”