PINS Nabs Record High on Double Upgrade

The analyst sees online advertising on the rebound

Deputy Editor
Oct 21, 2020 at 10:58 AM
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Pinterest Inc (NYSE:PINS) just opened to an all-time high of $50.90 this morning, surging on a double upgrade from BofA Global Research, which lifted its rating to "buy" from "neutral," and hiked its price target to $58 from $45. The analyst cited sector peer Snap's (SNAP) blowout earnings report, which it saw as a sign that the online advertising space in on the mend. At last glance, PINS is trading up 13% at $51.22. 

This bull gaps has PINS effectively toppling a recent ceiling at the $46 mark, and puts the security on track for its fifth monthly win. The equity has been on a roll since gapping back above the $28 mark in August, with several layers of support leading it higher, including the 40- and 10-day moving averages. For the year, Pinterest stock now boasts an impressive 173.2% lead. 

Circling back to analyst sentiment. A number of those in coverage haven't yet warmed up to the equity, leaving the door wide open for others to follow BofA Global Research's lead. Coming into today, nine of the 20 in coverage still consider the equity a "hold." Plus, the 12-month consensus price target of $42.23 is an 18.3% discount to current levels. 

Options are already flying off the shelves, with 81,000 calls and 23,000 puts exchange within the first hour of trading. The weekly 10/23 51- and 50-strike calls are the most popular, and it appears positions are being sold to open at both.

Meanwhile, short sellers are likely kicking rocks today. Short interest has skyrocketed during the last two reporting periods, up 40.5%. The 20.45 million shares sold short make up a hefty 23.7% of PIN's available float, and would take a little over a day to cover, at the equity's average pace of trading. 

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