Pinterest may launch 'meaningful' third-party partnership with Google involved: RBC
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Pinterest (NYSE:PINS) may be getting close to unveiling a "meaningful" third-party media network partnership with Google (GOOG) (GOOGL) as a potential partner, a development that could significantly boost the stock, investment firm RBC Capital Markets said on Monday.
Analyst Brad Erickson, who rates Pinterest (PINS) sector perform, said the idea of a media network partnership is based on recent management commentary and could wind up being a "significant catalyst" for the stock, helping the company better fill advertising supply compared to first-party relationships. 
If Pinterest (PINS) were to create a third-party media network partnership, not only would it see category expansion and create more real estate to monetize, but it could result in higher prices for ads and provide "marginal" return on ad spending support, Erickson posited.
It could also give Pinterest (PINS) access to a wider advertiser base, including small and medium-sized businesses, as well as have access to "meaningful" scale inside its existing advertising base.
"To us, the key debate is can PINS sustainably improve its [return on ad spending] to absorb incremental ad demand or is this an inorganic story of adding catalogs & filling in potentially less relevant/dilutive ad load," Erickson wrote in an investor note. 
"The former would be the holy grail, the latter would be an arguable concession of sub-par [return on ad spending] & less needle-moving [long-term]."
Erickson also raised his revenue estimates and his per-share price target on Pinterest (PINS) to $30 from $26 as a result of the potential launch.
Pinterest (PINS) shares rose more than 2% in premarket trading on Monday.
Late last month, Pinterest (PINS) said it would sub-lease its office space and abandon some offices as part of a broader restructuring plan it launched in February.