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Investing.com - UBS has reiterated its Buy rating on Spotify (NYSE:SPOT) stock with a price target of $850.00, according to a research note released Monday. The streaming giant, which has delivered an impressive 77% return over the past year and maintains a "GREAT" financial health score according to InvestingPro, is currently trading above its Fair Value.
The investment firm expects Spotify’s third-quarter results, scheduled for November 4, to align with management’s outlook, showing moderating foreign-exchange-neutral revenue growth from the previous 14.8% pace. This moderation is attributed to the company lapping previous price increases and maintaining flat annual margins as investments continue in partnership programs and platform enhancements.
UBS anticipates fourth-quarter guidance will demonstrate accelerating foreign-exchange-neutral revenue growth, partially supported by recent price increases and continued double-digit subscriber growth. The firm notes that margins are expected to increase seasonally but remain flat year-over-year.
The investment bank maintains a constructive view on Spotify shares, citing upcoming price increases, new tiers, product features, and advertising growth as factors that should support further acceleration in revenue growth.
UBS expects these developments to contribute to continued margin expansion for the audio streaming platform in the future.
In other recent news, Spotify has announced a significant partnership with Netflix to bring video podcasts to the streaming platform. This collaboration will feature content from Spotify Studios and The Ringer, including popular shows like The Bill Simmons Podcast and The Rewatchables, and is set to launch in early 2026 in the United States. Benchmark has maintained its Buy rating for Spotify with a price target of $800.00, while KeyBanc reiterated an Overweight rating and a price target of $830.00, citing that consensus estimates may be underestimating Spotify’s growth potential.
KeyBanc anticipates that Spotify’s third-quarter earnings will highlight improved engagement and gross margins, with further monetization actions expected in late 2025 and early 2026. Additionally, OpenAI has introduced a new feature that allows ChatGPT users to interact with services like Spotify directly within the app, creating playlists without leaving the interface. This development was unveiled during OpenAI’s annual developers event in San Francisco. These recent developments reflect ongoing strategic moves by Spotify to enhance its content offering and user engagement through innovative partnerships and technological integrations.
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