Jefferies announced on Thursday that it had upgraded its recommendation on Spotify shares to "buy", with the price target raised from $242 to $385.
In a research note dedicated to online music, the research firm is positive on the sector as a whole, from Spotify to UMG and WMG, anticipating a rise in their share prices over the coming years.
In its view, Spotify is in a position to raise its subscription prices again, which should enable it to grow sales by 15% a year.
Jefferies also expects operating profit to triple over the next three years as a result of gross margin improvement and ongoing cost discipline.
The analyst also backs up his optimism with investments in the platform, audiobooks, bundles and podcasts, leading him to make Spotify his "top pick" in the sector.
The teams at UBS, who are Buy on the stock, upgraded their target from $375 to $400, judging that the Swedish group was in a position to end the 2024 financial year with a gross margin in excess of 30%.
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Spotify Technology SA a Luxembourg-based company, which offers digital music-streaming services. The Company enables users to discover new releases, which includes the latest singles and albums; playlists, which includes ready-made playlists put together by music fans and experts, and over millions of songs so that users can play their favorites, discover new tracks and build a personalized collection. Its users can either select Spotify Free, which includes only shuffle play or Spotify Premium, which encompasses a range of features, such as shuffle play, advertisement free, unlimited skips, listen offline, play any track and audio. The Company operates through a number of subsidiaries, including Spotify LTD and is present in over 20 countries. Its service offers a music listening experience without commercial breaks.
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