On Monday, KeyBanc updated its outlook on Pinterest Inc . (NYSE:PINS), raising the price target to $48 from the previous $37 and maintaining an Overweight rating on the stock. This adjustment reflects a positive stance on the company's growth prospects, particularly as it enters a new phase of its product cycle.
The firm anticipates Pinterest to post a robust fourth-quarter performance, projecting approximately 14% growth, which slightly surpasses expectations. The forecast for the upcoming year is also optimistic, with revenue growth guidance set between 15% and 17% year-over-year. This outlook is based on a strong advertising market for retail, e-commerce, and consumer packaged goods, coupled with Pinterest's own efforts in product innovation and strategic partnerships.
KeyBanc's revised expectations extend into the years ahead, with an increase in revenue estimates for 2024 and 2025 by 3% and 4%, respectively. Moreover, the projections for EBITDA have been raised by 9% for both years. The new price target of $48 is grounded in a valuation of 25 times the estimated 2025 enterprise value to EBITDA.
The analyst's commentary highlights the underlying factors contributing to Pinterest's favorable outlook. The company is poised to benefit from the momentum in its relevant markets and its continued focus on innovation and collaboration. These elements are expected to provide sustained tailwinds through the year 2024.
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