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Investing.com - KeyBanc has lowered its price target on Spotify (NYSE:SPOT) to $830 from $860 while maintaining an Overweight rating on the music streaming giant’s stock. Currently trading at $640.57, Spotify has delivered an impressive 87.7% return over the past year, according to InvestingPro data.
The firm cited Spotify’s monthly active user (MAU) and Premium Subscriber momentum as evidence that the product continues to resonate with consumers, positioning the company well heading into 2026.
KeyBanc noted that advertising comparisons are expected to normalize next year, while pricing remains a potential lever for Spotify to pull against both music and non-music content.
The analyst firm attributed the second-quarter sell-off in Spotify shares to elevated expectations, technology sector rotation, and confusion over numbers rather than fundamental business concerns.
With shares now trading at approximately 24 times 2027 estimated EV/FCF, KeyBanc believes the risk/reward profile for Spotify remains attractive, maintaining its Overweight rating while adjusting the price target to $830, representing 5.9 times 2027 estimated EV/S and 33.3 times 2027 estimated EV/FCF.
In other recent news, Spotify reported its second-quarter earnings, revealing total revenues and operating income falling below Street estimates by 2% and 16%, respectively. This shortfall was attributed to foreign exchange headwinds and social charges. Despite these challenges, Spotify saw stronger-than-expected subscriber growth, adding 8 million net new subscribers, bringing the total to 276 million, which exceeded guidance by 3 million. Monthly active users also surpassed forecasts, increasing by 18 million to reach 696 million.
Several analysts have adjusted their outlooks for Spotify. Bernstein reiterated its Outperform rating, viewing the recent stock decline as a buying opportunity, while Benchmark lowered its price target to $800 due to concerns over Average Revenue Per User (ARPU) and advertising results. Cantor Fitzgerald maintained a Neutral rating with a $640 price target, noting the earnings shortfall. Rosenblatt also lowered its price target to $679, maintaining a Neutral rating, citing ARPU concerns despite the strong subscriber growth. Guggenheim reduced its price target to $800, citing foreign exchange headwinds, yet maintained a Buy rating due to positive subscriber metrics. These developments reflect a complex picture for Spotify, with mixed analyst reactions amid strong user growth and financial challenges.
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