It’s time to buy Pinterest stock, according to Wells Fargo. The bank upgraded the social media company’s rating to overweight from the same weight on Tuesday and raised its price target on the shares to $34 a share from $23. Wells’ forecast implies a nearly 29% gain from Tuesday’s close at $26.40. “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 available in time for the 2023 holiday season, and expected future partnerships with other scaled retail media networks.” Gawrelski noted that the Amazon partnership is expected to solidify in October. The analyst added that outsourcing efforts will help Pinterest’s ability to increase engagement and improve its user experience. He also said that better advertising capabilities “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 to accelerate print growth. However, the downside risk to Wells’ price forecast is a delay in the implementation of 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 shares are up 8.7% in 2023 – CNBC’s Michael Bloom contributed to this report.
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