Jessica Reif Ehrlich, an analyst from Bank of America Securities, reiterated the Buy rating on Spotify. The associated price target remains the same with $900.00.
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Jessica Reif Ehrlich has given his Buy rating due to a combination of factors that underscore Spotify’s solid operating momentum and attractive risk/reward profile. He expects the upcoming quarter to show continued strength across key performance indicators, with user engagement rising globally and recent international price increases being absorbed without meaningful churn. In his view, the absence of a U.S. price hike so far does not signal weakness, and the recent pullback in the share price—driven by broader market volatility and concerns around AI—creates a compelling entry point for long‑term investors.
Jessica Reif Ehrlich’s rating is based on the belief that AI-related risks are manageable and that Spotify is already moving to incorporate artificial intelligence into its platform rather than be displaced by it. He highlights improving profitability metrics, including higher expected operating income due to lower social charges, and sustained free cash flow strength. Looking ahead, he sees profit and cash flow growth supported by deeper subscriber penetration, further price optimization, expanded pricing tiers, improved advertising monetization, and new business lines such as audiobooks, which still have meaningful geographic runway. These drivers, in his view, justify both the Buy rating and a significantly higher price objective relative to the current trading level.
In another report released yesterday, Morgan Stanley also maintained a Buy rating on the stock with a $775.00 price target.