Piper says Pinterest partnership with Amazon ‘may be a larger opportunity’

Piper Sandler analyst Thomas Champion notes that on Wednesday, an Amazon (AMZN) corporate blog highlighted 1P advertisers will soon be able to promote on Pinterest (PINS) and other 3rd party sites. The blog states Sponsored Product ads from Amazon will extend directly onto Pinterest as if they were on the Amazon domain. The firm had previously interpreted the partnership to only include Amazon DSP advertisers. Amazon Sponsored Products should improve shopability and inventory on Pinterest, while potentially driving new users to the application as well. Overall, Piper acknowledges that this may be a larger opportunity than it first thought as Amazon’s scale should grow the current advertiser count for Pinterest and the Sponsored Product format should further drive the “lower-funnel”/transactional evolution for the app. The firm has an Overweight rating on Pinterest shares with a price target of $35.