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Investing.com - BofA Securities raised its price target on Spotify (NYSE:SPOT) to $900 from $700 while maintaining a Buy rating on the stock ahead of the company’s second-quarter results. The stock, currently trading at $767.71, has shown remarkable momentum with a 64.58% gain year-to-date.
The research firm expressed confidence that Spotify’s second-quarter 2025 results, scheduled for July 23, will show continued momentum across key performance indicators, at least in line with guidance on premium subscribers and monthly active users.
BofA Securities noted that dollar weakening will be a drag on second-quarter results relative to expectations, leading the firm to lower its revenue forecast to €4.25 billion compared to Spotify’s guidance of €4.3 billion, while maintaining its gross margin estimate of 31.5%.
The firm’s second-quarter operating income forecast of €445 million falls below Spotify’s guidance of €539 million to account for social charges resulting from the approximately 35% rise in share price during the quarter.
BofA Securities emphasized that social charges and foreign exchange headwinds do not indicate any slowdown in the fundamentals of Spotify’s business, which it described as strong with several positive drivers expected over the intermediate term. According to InvestingPro, Spotify maintains a "GREAT" financial health score, with revenue growing at 17.24% and multiple positive indicators suggesting robust business performance. Subscribers can access 20 additional ProTips and comprehensive analysis in the Pro Research Report.
In other recent news, Spotify has seen a series of analyst upgrades, reflecting optimism about its future growth and financial performance. Pivotal Research raised its price target to $900, citing Spotify’s strong global position in audio streaming and potential for expanded services like long-form video content. Guggenheim increased its target to $840, highlighting Spotify’s pricing power and growth in audiobooks and podcasts. Jefferies also raised its price target to $845, pointing to potential revenue boosts from price increases and changes to Apple (NASDAQ:AAPL)’s iOS platform. Meanwhile, JPMorgan adjusted its target to $730, emphasizing Spotify’s growth in monthly active users and positive cash flow. Cantor Fitzgerald, while maintaining a Neutral rating, increased its target to $640, acknowledging Spotify’s solid fundamental outlook despite margin challenges. These updates come as Spotify continues to innovate and expand its offerings in the competitive streaming market.
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