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Investing.com - Morgan Stanley (NYSE:MS) upgraded Pinterest Inc (NYSE:PINS) from Equalweight to Overweight on Monday, raising its price target to $45.00 from $37.00. The stock, currently trading at $37.11, has shown strong momentum with a 28% return year-to-date. According to InvestingPro data, Pinterest maintains a "GREAT" financial health score, supported by robust liquidity and strong growth metrics.
The upgrade comes as Morgan Stanley sees Pinterest’s multi-quarter GPU-enabled innovation yielding results, with ad checks showing improved ad efficiency, relevancy, and performance-driven growth. The firm believes these investments are now producing material benefits that, combined with easing comparisons and foreign exchange factors, can lead to accelerating growth. This optimism is supported by Pinterest’s impressive 79.6% gross margin and 17.8% revenue growth over the last twelve months.
Morgan Stanley now models 17-18% year-over-year revenue growth in the second half of 2025, placing its estimates approximately 4% above consensus for 2026. The firm expects better-than-anticipated second-quarter results and third-quarter guidance to demonstrate faster growth ahead when Pinterest reports earnings on August 7.
The investment bank highlighted Pinterest’s high incremental margins, projecting adjusted EBITDA approximately 12% above Street expectations for 2026. Morgan Stanley noted that tech companies with accelerating growth and expanding margins historically outperform, particularly if they’re viewed as GPU/GenAI beneficiaries.
At the new $45 price target, representing about 25% upside, Morgan Stanley believes Pinterest’s valuation remains attractive, implying a 16% discount to peer growth-adjusted multiples and a 16% discount to mid-cap advertising peer Snap, despite Pinterest being expected to grow 1.5-2 times faster with 2-3 times higher adjusted EBITDA margins. The stock currently trades at a P/E ratio of 13.2x, and InvestingPro analysis reveals 8 additional key insights about Pinterest’s valuation and growth potential. Get the full picture with the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, Pinterest Inc. has experienced several notable developments. Wells Fargo (NYSE:WFC) raised its price target on Pinterest to $42, citing strong user growth and improved margins, with a Q2 2025 revenue estimate of $980 million, representing a 15% year-over-year growth. TD Cowen also increased its price target to $43, driven by positive advertising checks and performance indicators, forecasting a 14.6% revenue growth for the second quarter of 2025. Meanwhile, KeyBanc lowered its price target to $40, though it maintains an Overweight rating, projecting Pinterest’s third-quarter guidance to align with market expectations.
Additionally, Pinterest shareholders approved key proposals during the company’s annual meeting, including the election of directors and amendments to bylaws and the Certificate of Incorporation. These amendments include officer exculpation as permitted by Delaware law and updated procedural requirements for shareholder nominations. Piper Sandler reported improvements in Pinterest’s advertising offerings, noting that Performance+ campaigns now demonstrate better pricing on similar click-through rates compared to standard campaigns. The company also filed a Restated Certificate of Incorporation, which became effective in May 2025. These recent updates reflect Pinterest’s ongoing strategic adjustments and market positioning efforts.
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