Pinterest shares rally as Amazon 'can materially move the needle' - Evercore ISI

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Pinterest shares rally as Amazon 'can materially move the needle' - Evercore ISI
Credit: © Reuters.

Pinterest (NYSE: PINS ) shares jumped Friday after Evercore ISI released a bullish note on the stock, lifting the price target to $50 from $45 per share and reiterating an Outperform rating. In addition, Evercore "materially" raised its estimates for the stock.

PINS is the firm's number one SMiD Cap Long idea in the wake of its proprietary tracking and analysis of the social media company's Amazon partnership and a series of channel checks.

At the time of writing, PINS shares are up around 4.35%, trading at around $38.60 per share.

Evercore ISI analysts said they are tracking a significant ramp in Amazon ads. "Over the last several months, we have noticed a significant ramp up in Amazon ads (both 1P and 3P) on Pinterest," they wrote. "Our tracking estimates an approximate 30% Amazon ad load across six of Pinterest's top categories."

They also noted modestly positive channel checks, which suggested there would be a significant ramp-up in the Amazon integration in early 2024. "That's what we're seeing," said Evercore.

The firm now has "increased confidence that Amazon moves the needle for PINS."

"We have increased confidence that this Amazon partnership can materially move the needle for PINS based on high commercial intent on Pinterest (50% of users have shopping intent), positive unit economics (we estimate that PINS will retain approx. 70% of every Amazon Sponsored Listing $ generated on Pinterest), and PINS' relatively small revenue base (just $30MM in incremental revenue boosts PINS revenue growth by 1%)," added Evercore.

"We have materially raised our estimates, with FY25 Revenue up 5% and FY25 EBITDA & FCF up 8%-12%," they added.

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