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Shares of Pinterest (NYSE:PINS) are trading more than 11% higher today after Piper Sandler analysts raised the rating to Overweight from Neutral with a new price target of $30 per share (up from $25).
The analysts see “multiple tailwinds” supporting Pinterest stock into 2023. They outlined three key reasons driving today’s upgrade of PINS stock.
They are also positive about Pinterest’s new leadership and investor activism. The analysts believe the social media company may also announce a buyback plan.
“PINS ended 3Q22 with $2.7BN in cash. With ~$500MM in FY23E FCF by our model, PINS is sufficiently profitable and over-capitalized. At 3Q PINS said they “continue to evaluate (the) broader capital allocation strategy.” PINS could repurchase ~10% of the float and still have ~$1BN in cash & equivalents on the B/S,” they wrote to clients in the upgrade note.
Pinterest stock was down 35% year-to-date based on yesterday’s closing price.
