Pinterest stock should be worth $34: Wells Fargo

Pinterest Inc (NYSE: PINS) has more room to the upside even though it’s already rallied over 25% in less than two months, says Ken Gawrelski – a Wells Fargo analyst.

Pinterest stock could climb another 30%

On Tuesday, Gawrelski raised his rating on the social media service to “overweight” and said its shares could climb to $34 – up another 30% from its previous close.

The analyst likes Pinterest stock particularly on the partnership it announced with Amazon.com Inc in April.

Pinterest is making optimal strategic move to outsource monetisation to overcome attribution and scale challenges. This includes Amazon and future partnerships with other scaled retail media networks.

Pinterest will report its Q2 results in the final week of July. Consensus is for it to lose a cent on a per-share basis this quarter versus 7 cents per share a year ago.

PINS will benefit from online ads recovery

Ken Gawrelski expects the partnership with Amazon to go live in October.

Outsourcing monetisation, he added, will further help with engagement and an overall boost to the user experience. The analyst said in his research note today:

Note that 10% improvement in int’l revenue/MAU yields 2%/4% upside to ’24 revs/EBITDA, expect partnership to drive step-function increase given PINS revs/minute at ~20% discount vs. Meta.

The Wells Fargo analyst is bullish on Pinterest stock because he forecasts better advertising capacity to significantly improve margins as well. Data from SensorTower suggests the image sharing platform noted a 14% increase in time spent per MAU in the second quarter. In February, Pinterest announced a layoff to cut costs.

The post Pinterest stock should be worth $34: Wells Fargo appeared first on Invezz.