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It has been quite a busy week for music streaming giant Spotify, with several leading analysts cranking up their bullish views on the platform. Thursday saw Jefferies kick off the rally, boosting the price target of SPOT stock to $385 from $242, while keeping its “Buy” rating.
What’s got Jefferies feeling so confident? The firm pegs streaming subscriptions to be the gift that keeps giving for Spotify. As the monthly fees are running currently somewhere around half of video services like Netflix, Jefferies says there is room for periodic hikes over the next few years to maximize revenue. And any price bumps from rivals Apple Music or others would only support SPOT’s position at the top of the charts.
It wasn’t until Friday, however, that KeyBanc joined the party, leveling up its SPOT target to a full $410 while touting the streaming platform’s strong revenue growth and improving margins. Though subscriber growth may hit some near-term choppiness, KeyBanc maintained its “Overweight” rating.
Then on Monday, BofA Securities cranked its SPOT forecast all the way up to $380, citing boosts to revenue, margins, income, and cash flow as future hits.
Underpinning all of this bullishness for investors is a deep faith in the value proposition and dominance of SPOT within a music streaming market that still has room to grow. Meanwhile, new basic and premium subscription tiers that recently rolled out in the United States are targeted to supercharge profits starting next year, according to KeyBanc analysis.
At Benchmark and Canaccord Genuity, firms stayed tuned to the wavelength of SPOT, also citing price hikes, efficiencies, and expansion as the long-term growth drivers.
