Spotify stock rises on price-target hikes
Spotify technology (Spot) stock edged closer to a buy point Wednesday after three Wall Street analysts raised their price targets on the streaming music leader.
On Wednesday, Deutsche Bank and UBS raised their price targets on Spotify stock, which they rated as a buy. Guggenheim Securities increased their price target on Spotify on Tuesday.
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In the stock market today, Spotify shares rose 5.9% to close at 490.69.
Spotify stock formed a flat base with a 506.47 buy point. IBD market controversy. That buy point is the stock’s all-time high reached on Dec. 4.
Deutsche Bank analyst Benjamin Black raised his price target on Spotify stock to 535 from 500. Black says he likes Spotify for its consistently high top-line growth and margins. He pointed out that the increase in subscription prices would have a positive effect and that a new premium service could be introduced.
Meanwhile, UBS analyst Bhatia Levy raised her price target on Spotify stock to 540 from 485.
“We are bullish on SPOT shares at ’25,” she said in a client note. Last year, Spotify reported strong financial growth, with strong revenue growth and a core of profitability, she said.
Levy expects Spotify’s growth to continue this year, supported by subscriptions and product upgrades.
“As the company continues to invest in its partner program, we expect gross margins to continue to expand, albeit at a slower pace,” Levy said.
She added, “We also see several potential incentives going forward, including (1) the eventual launch of premium/superfan tiers, (2) additional price increases through product enhancements (including audiobook offerings into new markets), (3) changes to family plans.” and (4) improved advertising trends as a measure of programmatic partnerships.
Spotify stock is on the IBD Tech Leaders list. It’s also on the IBD Leaderboard and Swing Trader lists.
Patrick Seitz at X, formerly of Twitter, at @IBD_PSeitz For more stories on consumer technology, software and semiconductor stocks.
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