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Investing.com - Benchmark raised its price target on Spotify (NYSE:SPOT) to $860.00 from $800.00 while maintaining a Buy rating on Wednesday. This target approaches the analyst high of $899.59, reflecting optimism about the streaming giant that has delivered a remarkable 64.55% return over the past year. According to InvestingPro, Spotify maintains a "GREAT" financial health score of 3.09.
The research firm cited premium ARPU (average revenue per user) strength in Spotify’s third-quarter results, despite fourth-quarter total revenue guidance falling 1% below consensus due to weaker ad-supported revenue and subscription guidance. Spotify has maintained solid 11.89% revenue growth over the last twelve months, with diluted earnings per share of $6.71.
Benchmark noted that Spotify’s third-quarter ad-supported revenue missed by 5 percentage points, partly due to a similar-sized year-over-year headwind from the company’s exclusives reorganization, which officially concluded in September 2025. Despite these challenges, InvestingPro data shows Spotify holds more cash than debt on its balance sheet, providing flexibility as it navigates these transitions.
The firm indicated that material advertising acceleration potential is now pushed to the second half of 2026, after DSPs (demand-side platforms) are onboarded in early 2026. Most of Spotify’s incremental ad-supported growth year-over-year is being driven by its automated sales channels.
In the third quarter, Spotify completed its remaining music negotiations with record labels, focusing on modernizing licensing arrangements with the top five U.S. music publishers, including securing broader video rights that the company views as strategically important for unlocking more product capabilities.
In other recent news, Spotify’s third-quarter earnings have drawn mixed reactions from analysts. Cantor Fitzgerald raised its price target for Spotify to $675, citing revenue that outperformed estimates by 1% and operating income that beat expectations by 16%. Rosenblatt, however, lowered its price target to $670, pointing to delayed ad growth despite positive variances in ad-based users and gross margins. Guggenheim also reduced its target to $800, expressing concerns over Spotify’s fourth-quarter premium subscriber guidance, which fell short of expectations. Meanwhile, Bernstein maintained an Outperform rating with a price target of $830, reflecting confidence in Spotify’s performance amid market volatility. BofA Securities increased its price target to $190, highlighting Spotify’s success in meeting key growth and margin metrics. These developments underscore the varied analyst perspectives following Spotify’s recent financial disclosures.
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