Here is your Pro Recap of the biggest analyst picks you may have missed since yesterday: upgrades at Pinterest, Chewy, and Yelp, and initiation at Blade Air Mobility.
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Pinterest earns an upgrade at Evercore ISI, shares gain
Pinterest (NYSE:PINS) shares gained more than 3% pre-market today after Evercore ISI upgraded the company to Outperform from In Line and raised its price target to $41.00 from $30.00.
The rating change was based on several factors:
1. Clear evidence of Digital Ad spend stabilizing, moving away from trough levels of late '22, and showing tentative evidence of an H2 recovery.
2. Operational improvements implemented by new CEO Bill Ready, leading to positive outcomes for both users and advertisers.
3. Combination of the first two reasons creating a fundamental inflection point, with the expectation of significant revenue growth acceleration, substantial margin expansion, and high double-digit EBITDA growth (e.g., 50%+ Y/Y in Q4) over the next 2-4 quarters. This growth potential is likely to result in a re-rating of PINS shares.
4. Current valuation (27X '24 EV/EBITDA & 21X '25 EV/EBITDA) considered reasonable for a company with the potential to sustain 30%+ EBITDA growth and a track record of consistent free cash flow (FCF) generation. The company is also expected to deliver 20%+ FCF margins by 2025.
The company is set to report its Q2/23 earnings on July 27. Street estimates stand at $0.12 for EPS and $695.71 million for revenues.
Blade Air Mobility started with a Buy rating, stock jumps
Ladenburg Thalmann initiated coverage on Blade Air Mobility (NASDAQ:BLDE) with a Buy rating and a price target of $13.00, as reported in real time on InvestingPro. Shares surged more than 10% yesterday.
According to the firm, Blade, despite being a small player in the U.S. air charter flight market, stands out due to its focus on By-the-Seat passenger services, long-term strategy to fully embrace Electric Vertical Aircraft (EVAs) upon commercial availability, and asset-light approach in procuring the needed aircraft.
Ladenburg Thalmann anticipates revenues to increase by over 45% to $212.8 million in 2023 and climb another 22% organically in 2024.
2 more upgrades
Goldman Sachs upgraded Chewy (NYSE:CHWY) to Buy from Neutral and raised its price target to $50.00 from $42.00, noting the stock presents an appealing risk/reward profile, particularly as the company shifts its focus towards regaining customer growth as well as given the potential for steady margin expansion.
Yelp (NYSE:YELP) shares surged more than 10% yesterday after Goldman Sachs upgraded the company to Buy from Neutral and raised its price target to $47.00 from $38.00, highlighting positive risk/reward and stable/rising local advertising trends.
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