Pinterest stock gains after Morgan Stanley upgrade

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Shares of Pinterest Inc. are up 1.4% in Monday morning trading after Morgan Stanley analyst Brian Nowak upgraded the stock to overweight from equal weight and raised his price target to $44 from $34. The company is “driving/benefitting from accelerating e-commerce and social shopping,” Nowak wrote in a note to clients. He likened Pinterest and Facebook Inc. to “social online malls” that could become increasingly important with the COVID-19 crisis changing the way people shop. Pinterest is the “purest play” on this trend, in Nowak’s view, as the company saw a big surge in user growth in the second quarter and now is in a place to monetize this heightened engagement with better targeting capabilities and automatic bidding for traffic objectives. Such improvements helped drive “structurally faster ad growth” for Facebook, Amazon.com Inc. , and Snap Inc. in the past, and now Nowak expects that Pinterest could see similar trends. Pinterest shares have gained 79% over the past three months as the S&P 500 has increased 14%. Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.