Although most music stocks gained value this week, Spotify dropped 4.6% to $302.27 despite the U.
S. markets surging to record heights and two new analyst reports that indicated the company’s share price has much room for improvement. On Wednesday (July 10), KeyBanc increased Spotify’s price target from $400 to $410 on the belief that the market is underestimating the company’s revenue, earnings and gross margin for 2025 and 2026.
In addition, Wolfe Research initiated coverage of Spotify with a $390 price target. Given Spotify’s closing price of $302.27 on Friday, KeyBanc’s new price target implies 35.
6% upside while Wolfe’s price target implies 29% upside. There was one Spotify dissenter this week, however. Redburn Atlantic downgraded Spotify to “sell” with a $230 price target — 23.
9% below Friday’s closing price. While Redburn’s analysts are impressed with Spotify’s operating momentum, they believe the market “is simply forecasting too much growth,” they wrote in an investor note. In April, Spotify — which will release its second-quarter earnings on July 23 —said it expects second-quarter revenue to be 3.
8 billion euros ($4.1 billion), which would be a 19.6% increase over the prior-year period.
It also said it anticipated 245 million subscribers, up 11.4% year-over-year. Spotify also bucked the trend among all stocks, which enjoyed a record-setting week.
The Dow Jones Industrial Average and S&P 500 reached all-time highs on Friday (July 12) wh.
