Summary
UBS has reduced its price target on Pinterest Inc. to $26.00 from $40.00 but continues to rate the shares Buy. The adjustment follows a fourth-quarter earnings miss and lighter guidance, prompting the firm to lower its 2026 revenue estimate by 2% and its adjusted EBITDA projection by 9%. UBS also increased cost of revenue assumptions on the expectation of greater investments into artificial intelligence.
Key details of the UBS update
UBS made the largest topline forecast reductions in Europe and the U.S./Canada, with additional cuts in rest-of-world markets. The bank highlighted recurring headwinds that Pinterest had previously disclosed, including tariff-driven effects on larger retailer advertising budgets and continued weakness in consumer packaged goods spending. Despite these pressures, UBS pointed to the companys strategy to expand its advertiser base and vertical coverage and to scale mid-market advertisers with less than $30 billion in gross merchandise value as reasons to retain the Buy rating.
The new $26.00 price target was noted to be closely aligned with InvestingPros Fair Value assessment for the company.
Recent operating results and other analyst moves
Pinterest reported fourth-quarter 2025 results that slightly missed analyst expectations. The company delivered earnings per share of $0.67 versus a forecasted $0.68, and revenue of $1.319 billion compared with an expected $1.33 billion. Following the results, Baird lowered its rating on Pinterest from Outperform to Neutral and cut its price target from $35.00 to $20.00, citing ongoing challenges with larger advertisers and the need to adjust expectations as restructuring activity plays out.
Market performance and valuation note
Pinterests stock has fallen 48.18% over the past six months and is trading near its 52-week low of $18.28. UBS observed that the shares are pricing in a steep de-rating, already trading at roughly a 10x EV/EBITDA multiple based on its revised estimates.
Outlook
UBS lowered its 2026 revenue forecast by 2% and trimmed adjusted EBITDA by 9%, while increasing cost of revenue assumptions due to higher anticipated spending on artificial intelligence initiatives. The firm expects the advertiser-related headwinds to persist, with no clear signs of recovery in consumer packaged goods budgets and continued tariff effects on larger retail advertisers. Investors and analysts are watching for signs of growth stabilization and margin improvement, which UBS and other observers project may materialize in the second half of 2026.
Implications for sectors
- Digital advertising and social media platforms are directly affected as advertiser budgets shift.
- Retail and consumer packaged goods sectors are implicated through their marketing allocations and responses to tariffs and budget pressures.
- Technology spending trends, notably investments in artificial intelligence, are influencing cost structures within digital media companies.
Note: This account reports developments cited in analyst notes and company results; it does not add new forecasts or data beyond those released by the company and the firms referenced.