In a report released yesterday, Jason Bazinet from Citi upgraded Spotify to a Buy, with a price target of $650.00.
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Jason Bazinet has given his Buy rating due to a combination of factors tied to valuation, earnings power, and upcoming catalysts. He argues that Spotify’s current share price does not fully reflect its future cash generation, noting that the stock trades at a modest multiple of projected 2027 free cash flow even after accounting for the company’s sizable cash and investment balances. In his view, the market is underestimating Spotify’s revenue trajectory and profitability, particularly as premium average revenue per user trends above broader sell-side expectations and gross margins look poised to come in stronger than consensus.
Bazinet also believes Spotify is positioned to outperform current Street forecasts, with his revenue and adjusted EBITDA projections running ahead of consensus. He highlights several potential drivers that could unlock further upside, including additional subscription price increases in Europe, possible price hikes by competing digital service providers that would lessen competitive pressure, and a greater pace of share repurchases supported by solid free cash flow. While he acknowledges risks—such as Spotify opting for acquisitions over buybacks or competitors delaying their own price increases—he concludes that the upside from favorable fundamentals and catalysts outweighs these concerns, justifying a Buy recommendation.
In another report released today, TipRanks – Anthropic also upgraded the stock to a Buy with a $570.00 price target.
SPOT’s price has also changed moderately for the past six months – from $620.010 to $503.920, which is a -18.72% drop .