Pinterest: Wolfe Research upgrades stock as macro overhang more muted

Investing.com -- Wolfe Research raised its rating for Pinterest (NYSE:PINS) to Outperform from Peer Perform on Thursday, keeping a $40 per share price target on the stock. 

In a note to clients, the firm pointed to a more stable macroeconomic environment, ongoing product improvements, and an attractive valuation.

Wolfe said, “We are upgrading PINS to OP with a $40 PT as we see i) macro overhang more muted than before; ii) sustained core fundamentals from product improvements— notably Performance+ (2-3 pt growth contributor); iii) 3P opportunity; and iv) reasonable valuation.”

The upgrade comes after Wolfe’s earlier hesitation in March, when analysts flagged concerns about macroeconomic headwinds. 

With a new U.S.–China trade agreement and stronger-than-expected first-quarter results and guidance, Wolfe said those risks have faded. 

“Now that U.S.&China have struck a trade deal and Q1 earnings (and Q2 guide) gave us further proof points on the fundamental health of the platform, we are raising our ests. and upgrading shares.”

Wolfe highlighted Pinterest’s Performance+ product suite as a key driver of ad revenue growth, estimating it contributes a 2–3 point tailwind. 

Field tests are said to have shown “improving impressions by +27.7% and lower CPCs of 22.5% vs. similar campaigns not leveraging Performance+.”

The firm also sees third-party (3P) ad partnerships, notably with Amazon (NASDAQ:AMZN), as a long-term catalyst.

Finally, Wolfe views the stock’s valuation as compelling. “At 13.5x ’26 EBITDA, we see a favorable risk/reward skew at current levels,” they wrote, noting peers like Snap and The Trade Desk (NASDAQ:TTD) trade at significantly higher multiples.