The stock market has had a rocky start to the week, but it appeared that investors were starting to get their footing on Wednesday morning. With a decision from the Federal Reserve on interest rates due out later in the day, many market participants feel prepared to see a pause with suggestions of sustained higher rates for the near future. Stock index futures moved up by about a quarter-percent as oil prices eased lower, easing back a few of the inflationary concerns that have hit consumers in the wallet.
Investors in Pinterest (PINS 4.04%) and Coty (COTY 0.35%) woke up to some good news that sent their shares sharply higher in premarket trading. Both companies have gone through their share of challenges, and while the tough times aren't necessarily over for good, investors seem more confident in the prospects for their respective businesses going forward. Read on so you won't miss the latest on Pinterest and Coty.
Pinterest paints a pretty picture
Shares of Pinterest were up 3% on Tuesday, and they climbed another 4% in premarket trading early Wednesday. The social media company had its investor day presentation yesterday, and investors were generally impressed with what they saw.
Pinterest's presentation was optimistic about the company's future. Pinterest believes that its visually based social media platform gives advertisers much different and more valuable information about user intent, particularly with privacy concerns leading to the elimination of third-party cookies. Using Pinterest, advertisers can better build awareness, drive consideration of product choices, and then convert those prospects into actual paying customers. Indeed, the visual nature of Pinterest's site actually invites ads to be content that advertisers can customize to be more effective.
Pinterest has seen its number of active users start rising again, and it's now focusing on monetizing its user base more effectively. That has always been a balancing act, as preserving the site's positive vibe is essential to Pinterest's success. Yet by using artificial intelligence to target ads more effectively, Pinterest believes it can thread the needle and make more money.
Some stock analysts concurred with that positive assessment, with Citigroup boosting its rating from neutral to buy and increasing its price target by $5 to $36 per share. Pinterest's stock remains far below its 2021 peak, but it's making progress toward establishing itself as a major player in social media.
Coty sees strong demand
Shares of Coty got an even bigger boost early Wednesday, rising 6% in premarket trading. The beauty company's stock benefited from positive guidance that showed unexpected strength in the business.
Coty said that in the past four weeks since providing initial guidance for fiscal 2024, it has seen high demand in key markets and categories. The company singled out its prestige line of fragrances as showing particularly strong momentum. Moreover, its recent launch of the Burberry Goddess fragrance has further cemented Coty's position as a leader in the fragrance industry.
As a result, Coty raised its expected growth rates for the first half of fiscal 2024 and for the full year by 2 percentage points. Coty now believes that core like-for-like sales growth in the first half will be between 10% and 12%, and full-year sales gains should come in between 8% and 10%.
The early months of the pandemic hit Coty hard, as lockdown restrictions hurt cosmetic demand. However, the stock has since regained positive momentum, and investors are hopeful that fragrance success could spur a new leg higher for the value of their holdings.
