Investing.com -- RBC Capital Markets announced a quarterly update to its “Top 30 Global Ideas List,” adding eight new stocks, including Pinterest Inc (NYSE:PINS), while removing seven, one of them being Amazon (NASDAQ:AMZN).
The inclusion of Pinterest comes amid the social media company’s strong growth potential, driven by increased ad relevance and conversion through initiatives such as direct links and a partnership with third-party retail media.
These changes are expected to significantly improve return on ad spend (ROAS), with Pinterest’s stock poised for a potential upward re-rating as growth reaccelerates to around 20%. RBC notes that the company is not reliant on U.S. user base expansion, as even its current users are seen as capable of driving higher growth through better ad engagement.
“While it’s unclear whether these changes will be a tailwind to US monthly active users (MAUs), we think the current user base is under-monetized to a degree that the company doesn’t necessarily need to grow US users meaningfully in order to accelerate revenue growth and drive margins higher.”
RBC set an Outperform rating on Pinterest stock with a price target of $48, representing a 48% upside from current levels.
In addition to Pinterest, several other stocks were added to RBC’s list this quarter, including American International Group (NYSE:AIG), Cameco (NYSE:CCJ), Healthequity Inc (NASDAQ:HQY), and Zalando SE (ETR:ZALG).
At the same time, Amazon, along with other notable names like Chubb (NYSE:CB) and Biogen (NASDAQ:BIIB), was removed from the list.
Amazon's stock fell by 6.8% in Q3 2024, underperforming RBC's broader Top 30 list, which delivered a 7.8% total return during the quarter.
RBC analysts, however, continue to see long-term value in Amazon, particularly in its AWS division, though it was removed in favor of higher-conviction ideas.
American Homes (NYSE:AMH) 4 Rent, Marks and Spencer Group PLC (LON:MKS), Restaurant Brands (NYSE:QSR), and S&P Global Inc (NYSE:SPGI) were also removed.