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Shares of Pinterest Inc. soared toward a record Wednesday, as Snap Inc.’s blowout results enticed BofA Securities analyst Justin Post to turn bullish.
The photo-sharing website’s stock PINS, +8.69% shot up as much as 15% earlier to an all-time intraday high of $52.05, before paring gains to be up 8.5% in active midday trading. The stock is well above Monday’s record close of $45.82.
Trading volume swelled to 34.3 million shares, compared with the full-day average of about 14.7 million shares.
The rally comes as Snap’s stock SNAP, +33.39% rocketed 33.4%, also to a record high, after the social-media company reported a surprise third-quarter adjusted profit and revenue and user growth that crushed expectations.
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BofA’s Post upgraded the stock to buy from neutral, while raising his stock price target to $58 from $45. His new target, which is about 18% above current levels, is higher than the targets of all of the 29 analysts surveyed by FactSet.
“Snap announced 3Q results with revenues significantly above the Street, another sign of a strong online advertising rebound, and suggesting traction for self-serve ad platforms with e-commerce exposure,” Post wrote in a note to clients.
He said he has been bullish on the online ad sector, but he had been hesitant to recommend investors buy Pinterest, given the stock’s valuation and uneven growth.
“However, with ad checks highlighting confidence in Pinterest’s strong user intent and ad platform innovation, (such as automated bidding), we are upgraded to buy,” Post wrote.
The stock soared 163.8% year to date, while Snap shares have run up 132.5% and the S&P 500 index SPX, -0.11% has gained 6.3%.
