Over 20% is Predicted for this Social Media Stock

The Raymond James investment banking group believes that Pinterest is on track to achieve steady growth in the long run and is a great candidate for a dividend rise. 

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A price target of $33 has been set for Pinterest shares. This implies a 20.7% upside from Wednesday's close price and also implies a price target of $28 on Pinterest shares. The firm has also initiated coverage of Pinterest with an outperform rating. 

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A note from analyst Aaron Kessler on Wednesday stated that Pinterest's unique visual discovery platform as well as its high-intent user base offers advertisers an attractive platform. "It is expected that the user base will continue to grow and the engagement metrics will rise as a result of international expansion and increasing personalization," Kessler wrote. 

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A macro slowdown can be an opportunity for Pinterest to outperform other digital advertising platforms due to Pinterest's high-intent audience, according to Kelssler. As a result of Pinterest's first-party signals on its platform, such as searches, saves, and board curations, it is less likely that it will experience ad privacy headwinds. 

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Kessler stated that the company was looking forward to double-digit long-term revenue growth driven by improvements in both the product and advertising ecosystem for both Pinners and advertisers, as well as an increased focus on shopping/e-commerce, video, and international business opportunities. 

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In his report, the analyst stated that Pinterest's margins would drop by roughly 16% by the end of 2022 as a result of slower top-line growth as well as more investments; however, the analyst also predicted that as revenues improve, and investment pace moderates, the margins may be able to return to [more than] 30% in the long run. 

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After falling by 2.3% during the previous trading session, Pinterest's shares gained less than 0.1% in the trading session which ended before the bell on Thursday morning. Shares have risen 12.5% for the year so far and 11.8% for the past twelve months.

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