Pinterest pops as Wells Fargo upgrades, citing Amazon deal, 'strong catalyst path'
Justin Sullivan
Pinterest (NYSE:PINS) shares rose more than 6% in early trading on Wednesday as investment firm Wells Fargo upgraded the company due to a "strong catalyst path" over the next six to twelve months, including the upcoming Amazon (NASDAQ:AMZN) deal. 
Analyst Ken Gawrelski boosted his rating on Pinterest (PINS) shares to overweight from equal-weight, noting that the Amazon (AMZN) integration is expected to go live early in the fourth-quarter, in time for the holiday shopping season.
"Note that 10% improvement in int'l revenue / MAU yields 2% / 4% upside to '24 revs / EBITDA, expect partnership to drive step-function increase given PINS revs / minute at ~20% discount vs. Meta in [international] markets," Gawrelski wrote in an investor note.
In addition, Gawrelski, who also raised his per-share price target to $34, said the company is seeing a "meaningful" acceleration in impressions in the U.S., due to rising engagement and ad load.
According to SensorTower, Pinterest (PINS) saw a 14% acceleration in time spent per monthly active in the second-quarter, compared to 6% in 2022. When combined with the page optimization for ad loads, Gawrelski estimated a 13% increase in ads per minute as U.S. impressions likely rose 35%. 
Gawrelski said a "similar story" is occurring what happened to Meta Platforms (META), where impression growth accelerated 8 points from the second-quarter of 2022 to the fourth-quarter, resulting in 8 points of revenue growth. 
Analysts are largely cautious on Pinterest (PINS). It has a HOLD rating from Seeking Alpha authors, while Wall Street analysts rate it a BUY. Conversely, Seeking Alpha's quant system, which consistently beats the market, rates PINS a HOLD.
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