Piper Sandler Pinterest Upgrades Pinterest; Sees 60% Upside

Piper Sandler analyst Thomas Champion upgraded Pinterest Inc PINS to Overweight from Neutral with a price target of $53, down from $58. The price target implies a 60% upside.

• The recent selloff in the shares "provides investors an opportunity," Champion tells investors. 
• Related Content: Analysts Remain Divided On Pinterest; Stock Falls
• While the stock has traded to $35 from a peak of $90, Pinterest's opportunity is essentially unchanged, and the shares appear de-risked, says the analyst. 
• Champion expects improving user trends in 2022, a "stable" mobile app user base as well as an "emerging" e-commerce surface, and progress on shopping. 
• He contends that Pinterest's risk/reward is now attractive for a commerce-focused advertising platform with shopping "optionality" and 60% incremental EBITDA margins.
• Guggenheim analyst Michael Morris downgraded Pinterest to Neutral from Buy, citing concerns over user-growth trends based on data from Ads Manager and Apptopia download trends through mid-December. 
• The analyst lowered his price target on Pinterest shares to $39 from $46 (17.7% upside).
• He estimates that Pinterest's aggregate users fell to 218.1 million in December from 226.9 million in November, adding that the site had lost 24 million users sequentially in the second quarter and then another 10 million in the third quarter. 
• He doesn't see Pinterest's use case developing as quickly as peers, which creates the risk that competitors improve their social commerce offerings "more quickly than Pinterest capitalizes on its position."
• Price Action: PINS shares traded higher by 1.60% at $33.66 in the premarket session on the last check Wednesday.