Investing.com - Citi maintained its Buy rating on Pinterest Inc (NYSE: PINS ) while raising its price target to $44 from $41, citing improvements in user engagement and monetization capabilities.

The research firm expressed confidence that Pinterest continues to gain share of lower funnel advertising budgets, which currently account for approximately two-thirds of the company’s revenue. This trend supports Citi’s belief that Pinterest can achieve at least the lower end of its mid-to-high-teens revenue growth targets.

Advertiser conversations during Cannes and at Pinterest’s Manifestival indicated growing demand for lower funnel tools like Performance+, according to Citi. The firm also highlighted new partnerships, including those with Instacart (NASDAQ: CART ) in Retail Media and LTK to enhance third-party influencer content, as factors that should improve the user experience.

Citi noted the launch of AI-powered Auto-Collages during Cannes, which allow advertisers to convert existing product catalogs into shoppable collages, creating a new form of Dynamic Product Ads. Users are saving these auto-collages at approximately twice the rate of regular product pins, with particularly strong traction among Gen Z users.

Pinterest also introduced an updated Trends Tool that provides deeper shopping insights to help advertisers better forecast consumer purchase activity, potentially attracting greater retail and e-commerce advertising budgets to the platform.

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