Spotify Technology: Oppenheimer upgrades rating to Outperform with a $800 PT.

Spotify Technology: Oppenheimer upgrades rating to Outperform with a $800 PT.

Investment firm Oppenheimer has upgraded its rating for Spotify (NYSE:SPOT) to "Outperform" with a new price target of $800. This upgrade comes on the heels of a series of positive analyst evaluations and highlights the company's robust growth prospects. The music streaming giant's shares have surged over 100% in the past year and currently trade at a P/E ratio of 99, sitting 14% below their all-time highs [1].

Oppenheimer cited multiple growth drivers for Spotify, including the "largest MAU runway in Internet," potential free tier monetization, and conversion benefits from App Store changes. The company's strong momentum is reflected in its 17.2% revenue growth over the last twelve months, with a "GREAT" overall financial health score according to InvestingPro data [1].

The investment firm also highlighted additional tailwinds such as a potential Superfan tier, continued gross margin leverage, and free cash flow generation enabling share repurchases. Oppenheimer forecasts a 16% revenue compound annual growth rate (CAGR) for Spotify from 2024 to 2030, based on a 9% subscriber CAGR and a 21% average revenue per user (ARPU) CAGR, primarily driven by ad monetization [1].

Oppenheimer’s $800 price target represents 20 times Spotify’s estimated 2030 earnings per share discounted at 7% annually, and includes €20 billion of potential share buybacks. This upgrade comes amidst a wave of positive evaluations from other investment firms, with UBS raising its price target to $895, KeyBanc Capital Markets to $860, Benchmark to $840, Bernstein to $840, and Goldman Sachs to $775, all highlighting various aspects of Spotify’s strategic initiatives [1].

These developments reflect a generally optimistic view of Spotify’s future among analysts, with multiple firms maintaining strong ratings and emphasizing the company’s growth potential.

References:
[1] https://za.investing.com/news/analyst-ratings/oppenheimer-upgrades-spotify-stock-to-outperform-on-growth-runway-93CH-3801944