Analyst Jessica Reif Ehrlich of Bank of America Securities reiterated a Buy rating on Spotify (SPOT – Research Report), retaining the price target of $700.00.
Jessica Reif Ehrlich’s rating is based on a combination of factors that highlight Spotify’s robust market position and growth potential. She expresses confidence that Spotify’s first-quarter results will align with its guidance on key metrics such as revenue, premium subscribers, and monthly active users. Despite potential headwinds from currency fluctuations and increased social charges due to a rise in share price, these factors do not suggest any fundamental weaknesses in Spotify’s business model.
Furthermore, Jessica Reif Ehrlich notes that Spotify’s subscription model is likely to be more resilient amid macroeconomic uncertainties. Although there may be some volatility affecting future advertising growth, Spotify is well-positioned for long-term success. The company is at a pivotal point in profitability and free cash flow, driven by deeper subscriber penetration, price increases, new pricing tiers, and digital advertising initiatives. Additionally, Spotify’s expansion into new businesses like audiobooks and education further supports the Buy rating with a price objective of $700.
In another report released on March 28, Wells Fargo also maintained a Buy rating on the stock with a $740.00 price target.