Pinterest Gets an Upgrade. ‘Positive Catalysts’ Make It a Buy for Analyst.

In midday trading, the stock was up 5.6% to $27.94. It has climbed about 15% this year. 

Gawrelski outlined why his team is high on the stock.

First is Pinterest’s ad partnership with
Amazon
(AMZN). In April, Amazon became Pinterest’s first partner for third-party ads. Gawrelski expects the ads to go live by the fourth quarter, which he says isn’t accounted for in the platform’s growth forecast, and expects Pinterest to announce more partnerships before year’s end.

Second is an increase for Pinterest in impressions, an online metric that measures how often ads are seen by users. The uptick is similar to one for
Meta Platforms
(META), which triggered more return-on-ad-spending, and in turn, generated revenue faster. For Pinterest, however, Gawrelski doesn’t think the impression number is integrated into ad-revenue growth forecasts in the U.S. and Canada. 

As for the social media industry as a whole, Gawrelski pointed to May’s fast growth of retail e-commerce sales, according to government statistics, and strengthening gross revenue reported by online homes chain
Wayfair
(W) earlier this month.

Write to Emily Dattilo at [email protected]