Pinterest Shares Rise After Rating Upgrade from Citi

On Wednesday, Citi boosted Pinterest from hold to buy after the discovery platform’s successful 2023 Investor Day.

Its stock price improved by 3.05% to $27.01 apiece on September 20. Moreover, analyst consensus predicts an additional gain of 0.04% for a $27.02 after-hours price per share.

Citigroup Inc. (Citi) set the analyst price forecast for Pinterest at 24.16% upside with a $24.24 to $47.25 range. Also, the global bank estimated a 14.85% annualized growth for the platform’s 2023 revenue, bringing the projection to $3.30 billion.

Pinterest held its first-ever Investor Day yesterday, sharing details of its future growth plan and development principles. Chief Executive Officer Bill Ready, Chief Financial Officer Julia Donnelly, and executive team members delivered the 158-slide presentation.

First, they delivered an in-depth review of the company’s evolving growth strategy that interweaves search, social media, and commerce. Next, the team delved into how PINS is refining its AI systems to evolve its data banks beyond other platforms.

Furthermore, its 465 million monthly active users (MAUs) include 55.00% of all US moms and 23.00% of all US dads. Thus, Pinterest has considerable access to household decision-makers with purchasing power.

Lastly, PINS showcased its Q2 20.00% year-over-year (YoY) growth in Gen Z MAU, its newest, most engaged, and fastest-growing audience. Hence, it has become both a hangout and a marketplace for the next generation of household decision-makers.

Citi Anticipates Rising Engagement for Pinterest

Citi analyst Ronald Josey said he is incrementally confident that retail advertisers will continue to flock to Pinterest. He emphasized how PINS used AI-driven optimizations to grow the size of its ad delivery funnel by 100x in 2023.

In addition, the analyst placed great importance on the company’s 170.00% YoY increase in video uploads. Videos increase user engagement, which leads to more pins saved, which, in turn, provides Pinterest with more data for customization.

On July 18, Pinterest introduced mobile deep linking, allowing brands to redirect users to a shopping page in their app. Josey stressed that this latest innovation directly led to a 235.00% increase in the app’s conversion rates.