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Pinterest (NYSE:PINS) shares were upgraded to Outperform from Peer Perform by a Wolfe Research analyst on Wednesday, with a $28 per share price target.
The analyst told investors in a note that their bullish view is centered on Pinterest’s long-term user growth and monetization potential under the new CEO.
“Despite uncertain macro, we see many positive catalysts over next 12-18 months,” wrote the analyst. “We have discussed the LT potential at PINS under the new CEO in our recent reports but largely remained on the sidelines due to overarching macro headwinds in the digital media space. Plenty of uncertainties still exist, however, we see several company specific catalysts for shares.”
Those catalysts include MAU growth, margin expansion, revenue acceleration, and some stability in the macro environment.
“At $22, PINS is trading at 25x FY23 EBITDA, which is modeled on modest revenue acceleration and margin expansion in FY23. Should PINS achieve faster progress on LT initiatives under the new CEO, we think shares could reach $35 on our bull case, or 56% upside,” he added.
Pinterest shares are up more than 4% at the time of writing.
