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Why Pinterest Stock Was Climbing Today

By Jeremy Bowman – Updated Oct 12, 2020 at 12:35PM

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An analyst endorsement helped lift the social media stock.

What happened

Shares of Pinterest (PINS 2.85%) were moving higher today after the image-discovery network got a bullish analyst note from Deutsche Bank. As of 11:05 a.m. EDT, the stock was up 3.2% after gaining as much as 5.6%.

So what

Deutsche Bank analyst Lloyd Walmsley lifted his price target on Pinterest from $43 to $55 and kept a buy rating on the stock. Walmsley lifted his price target on a number of social media stocks, including Snap and Twitter, and said he expected a strong round of results for the third quarter from the trio.

A woman looking at a Pinterest board on her iPad.

Image source: Pinterest.

The analyst expected Pinterest to give strong guidance for the fourth quarter, and said the company and other social media stocks would benefit form easy comps in the first half of the year, along with accelerating growth and expanding margins, as the economy recovers from the COVID-19 pandemic.

Now what

Pinterest has been a big winner this year with the stock up 140% year to date, and it's gained more than 300% since March. The stock has benefited from a surge in users during the pandemic, as well as its perceived advantages over Facebook, which has faced a backlash over anti-democratic abuses of its platform, which led to a boycott in July. As a social media company that prides itself on positivity and a place where users actually welcome ads, Pinterest offers a unique value proposition to advertisers, especially those who may be looking for an alternative to Facebook, Instagram, and Twitter.

Pinterest's third-quarter earnings report is due out at the end of the month. Analysts are expecting revenue to grow 34% to $376.5 million and for earnings per share to tick up from $0.01 to $0.02. A strong earnings report should push the stock higher, and Pinterest's penetrable market is still huge.

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. Jeremy Bowman owns shares of Facebook and Pinterest. The Motley Fool owns shares of and recommends Facebook, Pinterest, and Twitter. The Motley Fool has a disclosure policy.

Stocks Mentioned

Pinterest Stock Quote
Pinterest
PINS
$23.27 (2.85%) $0.65
Meta Platforms Stock Quote
Meta Platforms
META
$116.64 (1.13%) $1.31
Deutsche Bank Aktiengesellschaft Stock Quote
Deutsche Bank Aktiengesellschaft
DB
$10.66 (0.90%) $0.10
Twitter Stock Quote
Twitter
TWTR
Snap Stock Quote
Snap
SNAP
$9.48 (0.85%) $0.08

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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