UBS upgrades Pinterest stock on improving digital advertising conditions

Yahoo Finance Live looks at Pinterest shares following an upgrade by UBS analysts citing the state of the digital advertising landscape.

Video Transcript

- All right. My play is Pinterest. Shares on the move after an upgrade from UBS on Monday citing, quote, "improving advertising trends." Analyst Lloyd Walmsley raised their rating to buy from neutral and increased the price target to 35 from 27. That implies more than 25% upside in the stock. Walmsley adding, quote, "advertisers tell us Pinterest is taking bolder steps and moving more rapidly under its new CEO Bill Ready, which gives us more confidence in the likelihood of execution overall."

By the way, Ready will be Brian Sozzi's guest live later in the show from Shoptalk in Las Vegas. As for Pinterest shares, they have been the beneficiary of ongoing talks of that, yes, TikTok ban. They're up, let's see, about 2 and 1/2% today and more than 15% year to date. We've talked often about who will benefit from a TikTok ban, which I have said repeatedly will not happen. Congress will not move. But if they do, if they prove me wrong, certainly, Pinterest will benefit here, Seana.

- Certainly, Pinterest would be one of those names. It's been amazing for me to see just in terms of the lack of user growth in this name because I think Pinterest is great in terms of resources, has such an opportunity out there to convert some of their collages that they are so well known for into product purchases. And they haven't been able to monetize that as quickly or to the degree that I think a lot of people on the Street would like them to.

Under the new CEO Ready, they have made a tremendous amount of changes. He has laid out, certainly, and a turnaround plan, I guess you can say, here for the company. So a lot of people a little bit more optimistic. I think there's huge opportunity. They just need to capitalize that. And they also need to post stronger growth numbers because they're just, what, up about 4% in the most recent quarter?

- That opportunity was a good year or two ago.

- I know.

- It doesn't seem like they're pouncing on the e-commerce opportunity that was there, still is, but you got to pivot a little quicker than that, Ali.

- Yeah. They should have. Yeah.

- I agree. And I do think it's interesting to see how the stock has continued to outperform. You said up 15% year to date. On the year, it's up 10%. And since the announcement of Ready's takeover in June, it's up 42%. So investors clearly echoing this confidence that we're hearing elsewhere. But we'll see if they can really capitalize on those opportunities.