Pinterest Inc (PINS) PT Raised to $42 at JPMorgan
JPMorgan analyst Doug Anmuth raised the price target on Pinterest Inc (NYSE: PINS) to $42.00 (from $35.00) while maintaining a Neutral rating.
The analyst comments "PINS shares traded up +19% post close driven by stronger than expected 4Q results & 1Q guidance. PINS continues to make progress across low-mid funnel initiatives w/clicks to advertisers growing 90%+ Y/Y in 4Q, despite lapping the initial impact of Direct Links w/clicks growing 100%+ in 4Q23. Deeper personalization, improved relevancy, stronger engagement, & greater actionability are driving PINS’s 2024 WAU/MAU to increase ~100bps Y/Y to 62%. The 1Q revenue guide +15-17% FXN growth (+13%-15% reported) reflects progress in tightening the value creation to value capture gap despite tougher comps as PINS laps ~200bps of benefit from Easter timing & leap day. PINS cited early greenshoots across F&B as comps ease into 2025, though we still do not believe there is fundamental improvement to F&B advertising spend. Performance+ is delivering improvements for advertisers through lower CPAs/CPCs & campaign setup automation, & we expect monetization to build as PINS enhances the product offering, w/Performance+ ROAS bidding launching by the end of 1Q. 2025 Adj. EBITDA margin expansion will slow from +510bps Y/Y in 2024, but PINS continues to progress toward its 30-34% 3-5 year Adj. EBITDA margin target from the 2023 Investor Day. We’re encouraged by PINS’s ability to tighten the value creation to value capture gap, though measurement, higher ad load, lower funnel initiatives, 3P demand partners (Amazon, Google), & Performance+ are critical for monetization. Our 2025 & 2026 revenue increase by ~2% each & our 2025/2026 Adj. EBITDA estimates increase by 6% & 3%. We remain Neutral-rated & look for consistently strong growth & execution to become more constructive. Our December 2025 PT of $42 is based on ~17x 2026E FCF of $1.5B, which equates to ~16x 2026E Adj. EBITDA of $1.6B."