Spotify stock price target raised to $850 from $800 at Guggenheim

Investing.com - Guggenheim raised its price target on Spotify (NYSE:SPOT) to $850 from $800 on Monday, while maintaining a Buy rating on the stock. The streaming giant, currently trading at $732.81, has delivered an impressive 117% return over the past year, though InvestingPro analysis indicates the stock is trading above its Fair Value.

The price target increase follows Spotify’s announcement of price hikes in several European markets, including Germany, Austria, and Switzerland. The increases, which range from 8% to 22% across various subscription plans, affect approximately 10% of Spotify’s premium subscribers.

Earlier this month, Spotify also implemented price increases across regions representing about 25% of global subscribers who were not impacted by the company’s price hikes in the third quarter of 2023.

Guggenheim expects Spotify to announce another round of price increases in its largest markets, including the United States, before the end of 2025. The financial impact of these anticipated increases would begin in early 2026.

The firm’s higher price target reflects upward revisions to long-term revenue and profit estimates, with Guggenheim noting that the price increases are likely "gross margin accretive" for Spotify.

In other recent news, Spotify has announced plans to increase Premium subscription prices across various international markets, including South Asia, the Middle East, Africa, Europe, Latin America, and the Asia-Pacific region. The price hikes will range from 9% for Individual plans to 16.7% for Family plans, with current subscribers set to receive email notifications about the changes. Wells Fargo (NYSE:WFC) has reiterated its Overweight rating for Spotify, citing strong customer affinity and a low churn rate, along with double-digit growth in subscribers and monthly active users. Wolfe Research also maintained its Outperform rating, while KeyBanc adjusted its price target to $830, emphasizing the company’s momentum in monthly active users and Premium subscribers. Bernstein continues to support an Outperform rating, viewing a recent stock pullback as a favorable entry point and maintaining confidence in Spotify’s projected gross profit improvements by 2026. These developments highlight Spotify’s strategic moves and the positive outlook from several financial analysts.

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