Why Are Pinterest Shares Are Trading Higher On Monday?

Advertisers told analysts at UBS that Pinterest Inc (NYSE: PINS) is taking bolder steps under its new CEO Bill Ready to move more rapidly towards a significant improvement in ad efficacy that could ultimately drive budget and further monetization partnerships, something that UBS took as a catalyst for the social curation website.

The PINS Analyst: Lloyd Walmsley upgraded Pinterest from a Neutral to a Buy rating, and increased the price target from $27 to $35, causing the stock to pop 4% on during Monday's premarket session.

Check out Pinterest's analyst ratings here. 

Walmsley said he sees three positive levers from Pinterest's partner monetization strategy, including rapid potential improvement in international monetization, an increase in ad load, and pure price. The analyst said a large global potential partner could help with all three levers, while smaller local partners like retail media networks could help more narrowly.

UBS predicts that a ramp-up of international market share could drive nearly $500 million of revenue in 2024 if Pinterest were to get the same market share it has in the U.S.

Walmsley noted that recent channel checks suggest that Pinterest's new measurement and attribution solutions are showing promising signs of significant gains in ad performance, with one ad exec telling UBS that the platform has already gone from "a zero to a seven out of ten."

UBS thinks that Pinterest's early ad tech partnerships have already improved the perceived return on ad spend among early adopter advertisers, setting the stage for revenue acceleration even before adding significant new sources of demand.

The analyst said that Pinterest’s revenue opportunities are supported by the company’s recent enhancements and improvements to the ad stack, which increases its ability to monetize by way of higher ad load.

PINS Price Action: Shares of Pinterest are trading 5% higher on Monday to $28.85, according to data from Benzinga Pro.

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