Pinterest (NYSE:PINS) poked higher Thursday after Raymond James said it initiated coverage of Pinterest with an outperform rating. The firm said it expects steady user growth, as well as “double-digit long-term revenue growth” from product improvements.
Meantime, speculation has abounded that the company and Google (NASDAQ:GOOGL) may draw closer. The latter firm calls it a "meaningful" third-party media network partnership with Google as a potential partner, a development that could significantly boost the stock, investment firm RBC Capital Markets said on Monday.
Analyst Brad Erickson, who rates Pinterest sector perform, said the idea of a media network partnership is based on recent management commentary and could wind up being a "significant catalyst" for the stock, helping the company better fill advertising supply compared to first-party relationships.
If Pinterest were to create a third-party media network partnership, not only would it see category expansion and create more real estate to monetize, but it could result in higher prices for ads and provide "marginal" return on ad spending support, Erickson posited.
It could also give Pinterest access to a wider advertiser base, including small and medium-sized businesses, as well as have access to "meaningful" scale inside its existing advertising base.
Erickson also raised his revenue estimates and his per-share price target on Pinterest to $30 from $26 as a result of the potential launch.
PINS took on 43 cents, or 1.6%, to $27.76.
Tech Insider
