Boris Van, an analyst from Bernstein, reiterated the Buy rating on Spotify. The associated price target is $840.00.
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Boris Van has given his Buy rating due to a combination of factors that highlight Spotify’s potential for growth and profitability. Despite some expected short-term challenges such as foreign exchange impacts on Premium ARPU and top-line growth, Boris Van believes that Spotify’s user metrics and the benefits from recent price increases will bolster its financial performance. Additionally, deferred taxes from TME appreciation are expected to offset the impact of higher social charges, providing further financial stability.
Boris Van also points to Spotify’s long-term growth prospects, driven by its pricing power and the low churn rate following recent price hikes. The company is poised to leverage its high-margin non-music content verticals, such as podcasts and audiobooks, to achieve significant gross margins. The anticipated launch of a superfan-focused subscription tier is expected to contribute to a notable gross profit inflection by 2026. These factors, combined with strategic pricing adjustments and improved podcast profitability, support Boris Van’s confidence in Spotify’s ability to deliver sustained growth and justify the Buy rating.
In another report released on July 2, Goldman Sachs also reiterated a Buy rating on the stock with a $775.00 price target.