JPMorgan upgrades this social media stock, says it can rally 25%
JPMorgan has a plethora of reasons for moving off the sidelines on Pinterest . Analyst Doug Anmuth upgraded shares of the visual search platform to overweight from neutral and lifted his price target by $5 to $40. With that refreshed target, Anmuth sees the stock rallying 25.4% from Monday's close. "Given solid execution, potential upside to estimates, & what we believe remains lukewarm market positioning, we view the risk/reward on PINS as favorable," Anmuth wrote to clients in a Tuesday note. Anmuth pointed out that the majority of monthly active users and revenue are tied to the mobile app, which can limit downside from disruptions to search platforms like Google. Pinterest also has advertising abilities that can allow it to close what he called a gap between value creation and value capture, the analyst said. On the finance front, Anmuth said Pinterest is near the low end of its three-to-five year adjusted EBITDA margin target set at the company's 2023 investor day. Additionally, he said there's more upside potential given faster revenue growth and a pattern of spending discipline. Anmuth also called the stock's valuation "undemanding." He noted shares trade at 13 times 2026 free cash flow estimates and 12 times 2026 expected adjusted EBITDA. With the upgrade, Anmuth joined the majority of Wall Street with a buy-equivalent rating, per LSEG. PINS YTD mountain Pinterest, year-to-date Shares popped more than 4% in Tuesday's premarket trading following the call. The stock has gained about 10% this year, but is still well off its February highs.
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