RBC Capital Markets Updates “Top 30 Global Ideas List”

RBC Capital Markets has announced a quarterly update to its “Top 30 Global Ideas List,” adding eight new stocks, including Pinterest Inc (NYSE:PINS), while removing seven, including Amazon (NASDAQ:AMZN).

Key Highlights

• Pinterest’s Growth Potential: The inclusion of Pinterest comes amid the 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.
• Improved ROAS: These changes are expected to significantly enhance Return on Ad Spend (ROAS), with Pinterest’s stock positioned for a potential upward re-rating as growth reaccelerates to around 20%.
• User Engagement Strategy: RBC noted that Pinterest is not solely reliant on U.S. user base expansion, as current users can drive higher growth through better ad engagement.

“While it’s unclear whether these changes will be a tailwind to U.S. monthly active users (MAUs), we believe the current user base is under-monetized sufficiently that the company doesn’t need significant U.S. user growth to accelerate revenue growth and improve margins.”

• Rating and Price Target: RBC set an Outperform rating on Pinterest stock with a price target of $48, representing a 48% upside from current levels.

Other Stocks Added & Removed

• Other stocks added this quarter include American International Group (NYSE:AIG), Cameco (NYSE:CCJ), Healthequity Inc (NASDAQ:HQY), and Zalando SE (ETR:ZALG).
• Meanwhile, Amazon and notable names like Chubb (NYSE:CB) and Biogen (NASDAQ:BIIB) were 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. Analysts see long-term value in Amazon, especially in the AWS division, despite its removal from the list.

Other removals included American Homes (NYSE:AMH) 4 Rent, Marks and Spencer Group PLC (LON:MKS), Restaurant Brands (NYSE:QSR), and S&P Global Inc (NYSE:SPGI).