Summary
RBC Capital reduced its price objective for Pinterest Inc. (NYSE: PINS) to $17.00 from $38.00 and retained a Sector Perform rating on the shares. The change follows a weaker fourth quarter in which RBC pointed to tariffs as the main contributor to the shortfall, and the broker described the results as reflecting "a more consistent pattern of adverse concentration" within the business.
RBC's revision and market context
The revised target of $17.00 sits slightly below Pinterest's most recent trading price of $18.54, with the stock trading just above its 52-week low of $18.28. According to InvestingPro data cited by RBC, Pinterest's shares have fallen 48.18% over the past six months, and technical measures indicate the stock is in oversold territory.
Drivers cited by RBC
RBC attributed the quarter's disappointment primarily to tariffs. The broker argued that the result points to "a more consistent pattern of adverse concentration" in the company's business. RBC also noted that its prior constructive thesis - hinging on a product cycle and improving conversion - did not come to pass.
Despite a number of platform updates and partnerships, RBC said Pinterest has not seen the anticipated inflection in performance. Among the product and commercial changes referenced were mobile deep linking, direct links, expanded retail media partnerships and Performance Plus. Even with these initiatives, the firm sees limited scope for Pinterest to expand meaningfully with small and medium-sized businesses.
Outlook and potential upside
RBC indicated that, absent new drivers of user engagement or content growth, "the opportunity to structurally improve conversion & pricing to remain more muted." The firm did acknowledge one clear scenario that could alter its cautious stance: a step-function improvement in targeting and conversion driven by AI advances. Such improvements are described as the most likely factor that could prove the firm wrong.
Valuation notes
Separately, InvestingPro analysis referenced in the coverage suggested Pinterest appears undervalued versus its Fair Value. The platform also offers 13 additional ProTips for subscribers seeking deeper financial and operational detail on the company.
Responses from other brokers
Following Pinterest's earnings report, multiple analysts adjusted ratings and forecasts:
- Loop Capital moved its rating from Buy to Hold, citing an earnings miss, lowered guidance and increased spending.
- BofA Securities cut its rating to Neutral, expressing concerns about competition and Pinterest's inability to boost engagement as expected.
- JPMorgan shifted to Neutral, noting revenue headwinds and a deceleration in revenue growth guidance for the upcoming quarter.
- Evercore ISI downgraded to In Line after a "Miss & Lower" fourth-quarter result, signaling slowing growth.
- UBS maintained a Buy rating but reduced its price target to $26, reflecting a weaker outlook and downward adjustments to long-term revenue and EBITDA forecasts.
Market implications
The string of downgrades and target cuts highlights growing analyst concern about Pinterest's ability to monetize effectively amid competitive and macroeconomic pressures. The adjustments affect perceptions across technology, digital advertising and online retail sectors where Pinterest operates and sells ad inventory.
Conclusion
RBC's decision to cut its price target sharply and maintain a Sector Perform rating, combined with similar moves from several other brokerages, signals a more cautious near-term view on Pinterest until the company demonstrates clearer evidence of improving engagement, content growth or conversion metrics. The limited near-term expansion opportunity with small and medium-sized businesses and tariff-related headwinds were central to RBC's reassessment.