It’s a great day to be invested in Pinterest (NYSE:PINS) as a Piper Sandler analyst just gave shares an upgrade. There’s more to the story, though. Notably, the analyst offered high praise and a strongly bullish outlook for Pinterest. There could be a turnaround moment here after a bruising year for PINS stock.
Hailing from San Francisco, Pinterest operates an image-sharing website. Oftentimes, those images are based on products that small businesses are trying to sell to the public. In a year of elevated inflation, however, Pinterest’s business model certainly faced headwinds.
But Piper Sandler analyst Thomas Champion isn’t focused too much on the headwinds now, and even suggested there are “multiple tailwinds” for Pinterest. Champion championed PINS stock with an upgrade from “neutral” to “overweight,” which is similar to a “buy” rating.
With that upgrade, the Piper Sandler analyst cited a survey of advertising buyers which indicated Pinterest has “a better product” now. Champion further observed that the “recent hiring spree appears halted” at Pinterest. A reduced headcount should help Pinterest cut its expenses. Consequently, Champion predicts, Pinterest’s “margins should respond given slowing growth and the benefits of scale.”
What’s Happening with PINS Stock?
Apparently, the market enjoyed hearing what Champion had to say about PINS stock today. Shares rallied as much as 11% this morning as financial traders got wind of the upgrade and positive analysis.
It also probably helped that November’s annualized Consumer Price Index (CPI) reading came in lighter than expected. Still, today, Pinterest shares easily outperformed the major stock market indices, such as the Nasdaq 100 and the S&P 500.
Perhaps that result shouldn’t be surprising, as Champion provided a highly bullish outlook for Pinterest. For example, the analyst declared PINS stock “provides exposure to a higher-income demographic with commercial intent.” In other words, Pinterest users have the means and and the desire to buy products and services.
Furthermore, Champion seems to suggest Pinterest could gain traction among Generation Z social media users. “[W]e now see an entry into younger cohorts which comprises a smaller part of the base today,” the analyst explained.
Whether Champion’s optimistic vision for Pinterest will unfold as anticipated remains to be seen. However, at least today, PINS stock investors can certainly enjoy the bullish price action.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
