Phillip Capital Raises Spotify Rating to Neutral After Recent Share Pullback

Phillip Capital upgraded Spotify's rating to "neutral" from "reduce" after a recent share pullback following Q2 results. The firm cited a recent pullback as a reason for the upgrade.

Phillip Capital has upgraded Spotify's rating to "neutral" from "reduce" following the recent share pullback after the company's Q2 earnings results. The firm cited the pullback as a reason for the upgrade, indicating a shift in their outlook on the streaming giant's prospects.

Spotify's Q2 earnings report presented a mixed bag of results, with share prices dropping more than 11% following the release. The company's performance was characterized by a mix of positive and negative indicators, including subscriber growth and lower-than-expected advertising performance. Additionally, external factors such as foreign exchange losses and higher stock-based compensation expenses contributed to the overall financial picture [1].

Analysts generally took a long-term perspective on Spotify's results, focusing on the company's ability to attract subscribers and generate additional revenue. Despite the quarterly bumps, analysts maintained their overall positive theses regarding Spotify's long-term growth prospects. For instance, Spotify's investments in AI and video podcasts were seen as potential drivers for increased engagement and revenue [1].

Phillip Capital's upgrade reflects a more balanced view of Spotify's performance, acknowledging the recent pullback as an opportunity rather than a sign of long-term weakness. The firm's neutral rating suggests a cautious but optimistic outlook, indicating that while there may be short-term challenges, the company's long-term prospects remain promising.

References:

[1] Billboard. (n.d.). Spotify Stock Fell Q2 Earnings Analysts Worried. Retrieved from https://www.billboard.com/pro/spotify-stock-fell-q2-earnings-analysts-worried/