Cantor Fitzgerald cuts Spotify price target to $520

On Wednesday, Cantor Fitzgerald analyst Deepak Mathivanan revised the price target for Spotify Technology SA (NYSE:SPOT), reducing it to $520 from the previous $600, while maintaining a Neutral rating on the stock. Currently trading at $572.39, with a market capitalization of $117.17 billion, InvestingPro analysis suggests the stock is trading above its Fair Value. Mathivanan’s outlook for the first quarter of 2025 includes revenues and EBIT that are expected to be slightly below the company’s prior guidance, influenced by foreign exchange factors. However, subscriber additions are anticipated to align with Spotify’s projections. With Spotify’s next earnings report due on April 29, InvestingPro data shows impressive revenue growth of 18.31% and a GREAT financial health score, suggesting strong fundamentals despite near-term challenges.

The analyst pointed out that gross margins are likely to decline sequentially due to the seasonal nature of advertising and the costs associated with video podcast content. Looking ahead to the second quarter of 2025, Mathivanan predicts that foreign exchange will continue to pose challenges to revenue guidance, but he remains optimistic about Spotify’s fundamental key performance indicators, such as subscriber numbers and gross margins.

Spotify’s shares have seen a significant increase, rising 28% year-to-date, positioning them as one of the top-performing stocks within the Cantor Internet universe. The stock has delivered an impressive 92.03% return over the past year, trading at a P/E ratio of 89.94. Despite the lowered price target, the analyst’s stance on Spotify remains unchanged, reiterating a Neutral rating. Mathivanan appreciates the near-term setup of the company, highlighting its defensive characteristics as it approaches its earnings report.

In other recent news, Spotify Technology SA has announced the renewal of its contract with podcast host Bill Simmons, securing his presence for at least the next two years. This move underscores Spotify’s commitment to its podcast and video content strategy despite previous cutbacks in original podcast investments. Analysts have been active in revising their outlooks on Spotify, with KeyBanc Capital Markets lowering its price target to $625 while maintaining an Overweight rating, citing improved content offerings and monetization strategies. Meanwhile, FBN Securities initiated coverage of Spotify with a "Sector Perform" rating and a price target of $645, highlighting the company’s potential for subscriber growth and pricing strategy improvements.

Redburn-Atlantic has upgraded its rating on Spotify from ’Sell’ to ’Neutral,’ raising the price target from $230 to $545, acknowledging growth prospects in audiobooks and potential new service tiers. This adjustment indicates a cautious yet optimistic view of Spotify’s current valuation and future opportunities. In a separate development, Spotify’s CEO, Daniel Ek, has accused Apple (NASDAQ:AAPL) of not adhering to the European Union’s Big Tech rules, urging regulators to enforce compliance. Ek’s comments reflect ongoing tensions between Spotify and Apple over regulatory practices in the tech industry. These recent developments provide investors with a broader perspective on Spotify’s strategic moves and market positioning.

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