Pinterest shares rise after J.P. Morgan's bullish rating

Analysts at J.P. Morgan upgraded their investment rating on Pinterest (NYSE:PINS) to "overweight" from "neutral," citing strong progress the company has made across its 2023 Investor Day priorities.

Shares of the company are up nearly 5% in premarket trading on Tuesday.

JPM has praised the image-sharing social media platform for growing its users, improving its monetization and ARPU, and driving profitable growth.

The research firm has noted that the company has seen "solid MAU growth" and extensive engagement through improving platform relevancy and actionability for users. JPM also expects upside to multi-year profit from faster revenue growth and cost discipline for PINS.

"Importantly, we believe PINS is leveraging its full-funnel ad approach and automation/AI capabilities — including Performance+—to capture a greater share of ad spending," JPM said Tuesday. "Given solid execution, potential upside to estimates, and what we believe remains lukewarm market positioning, we view the risk/reward on PINS as favorable."

PINS' price target was hiked to $40 from $35, implying an upside of 25.4%.