Deutsche Bank (DB) analyst Lloyd Walmsley upgraded Pinterest (PINS) to Buy from Hold and raised his price target for the shares to $40 from $26. The stock in premarket trading is up 17.5%, or $4.95, to $33.25.

The analyst raised his estimates meaningfully following last night's Q2 results on more confidence that the company can scale its ad business, in the U.S. and internationally, faster than expected.

Pinterest is executing across more vectors of growth than just about any company in our coverage, Walmsley tells investors in a research note. He sees "significant upside potential" to estimates and the stock.