It’s time to buy Pinterest shares, according to Wells Fargo. The bank upgraded the social media company to overweight from equal weight Tuesday and raised its price target on the stock to $34 per share from $23. Wells’ forecast implies nearly 29% upside from Tuesday’s $26.40 close. “We believe Pinterest is making the optimal strategic move to outsource monetization to third-parties to overcome its attribution and scale challenges,” analyst Ken Gawrelski wrote. “This includes an announced partnership with Amazon, now expected to be live in time for the 2023 holiday season, and future expected partnerships with other scaled retail media networks.” Gawrelski noted the Amazon partnership is expected to take hold in October. The analyst added that the outsourcing efforts will aid Pinterest’s ability to grow engagement and improve its user experience. He also said that better advertising capacity “should drive a materially stronger revenue margin outlook for the company.” Gawrelski added that he expects management to present third quarter guidance of an additional 7% year-over-year for impression growth acceleration. However, the downside risk to Wells’ price forecast is a delay in implementing the Amazon deal or a slowdown in user engagement, he said. Pinterest will report second quarter results on July 27. Pinterest shares have lagged the broader market this year, rising just 8.7%, while the S & P 500 is up 14%. PINS YTD mountain Pinterest stock has climbed 8.7% in 2023 — CNBC’s Michael Bloom contributed to this report.
