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Investing.com - Guggenheim raised its price target on Spotify (NYSE:SPOT) to $840 from $725 on Wednesday, while maintaining a Buy rating on the global streaming audio leader. The stock has shown remarkable momentum, delivering a 133% return over the past year and currently trading near its 52-week high of $754.21.
The firm updated its model to reflect currency changes, particularly noting the negative reporting impact of a relatively stronger Euro. Guggenheim also factored in social charges related to the approximately 36% share price appreciation since March 31, estimating an incremental second-quarter non-cash expense of €122 million.
Guggenheim expressed continued conviction in Spotify’s mid and long-term growth opportunity, citing core pricing power and potential tier expansion as key factors supporting its confidence. The firm also highlighted expanded delivery of audio formats, particularly audiobooks and podcasts, as growth drivers. According to InvestingPro data, the company’s strong 17.24% revenue growth and "Great" financial health score support this optimistic outlook, with 20 additional exclusive ProTips available for subscribers.
The early-stage commerce opportunity presented by app-store changes was another factor underpinning Guggenheim’s positive outlook. The firm had previously provided more detailed analysis on audiobooks and app store changes in its May 12 model update.
The new price target of $840 represents a significant increase from the previous target of $725 and is based on a discounted cash flow (DCF) analysis with a 12-month time horizon. While trading at a relatively high P/E ratio of 112.29, analyst targets currently range from $465.22 to $901.25, reflecting diverse views on the company’s valuation.
In other recent news, Spotify has seen several updates from research firms regarding its stock price targets and growth prospects. Cantor Fitzgerald raised its price target for Spotify to $640, maintaining a Neutral rating, citing a solid fundamental outlook despite some margin headwinds. Pivotal Research increased its price target to $900, maintaining a Buy rating, and highlighted Spotify’s strong global position in audio streaming and potential for diversified service offerings. Jefferies also raised its price target to $845, citing potential revenue and EBITDA growth driven by price increases and improved advertising monetization.
JPMorgan analysts increased their price target to $730, maintaining an Overweight rating, and noted Spotify’s expansion in monthly active users and positive free cash flow. Bernstein SocGen Group maintained its Outperform rating and a price target of $825, expressing confidence in Spotify’s market position and growth potential. These developments reflect a generally optimistic view among analysts about Spotify’s future performance in the competitive streaming market.
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