The stock market was having an upbeat day on Friday, with all three major indices in the green as of 2 p.m. EDT. However, the tech-heavy Nasdaq was the laggard of the three, up by just 0.3% versus gains of more than 1% for the Dow Jones Industrial Average and S&P 500.
Despite the relative weakness in the tech sector, social media stock Pinterest (PINS -2.81%) was surging to start the fourth quarter, with shares rising as much as 6% during the trading session. As of 2 p.m. EDT, its shares were up by about 3.5%.
The short explanation behind Friday's move is that an analyst gave the stock some help. An analyst at RBC Capital initiated coverage on Pinterest with a sector perform rating, which is essentially neutral, but with a $58 price target, implying about 10% upside even after Friday's pop.
The analyst cited Pinterest's improved monetization, but expressed reservations about the stagnant U.S. user growth the company reported in the second quarter.
To be sure, we tend to take analysts' opinions with a big grain of salt, and this one wasn't exactly a glowing endorsement of Pinterest. However, after two straight quarters of disappointing results and concerns that it could be tough for the social media company to keep growing its user base as the consumer behavior gets back to something more like its pre-pandemic normal, a $58 price target despite the headwinds facing the company seems to be music to the ears of Pinterest's shareholders.