Spotify shares rebound continues as KeyBanc sets target price of $ 340
The value per share of Spotify (NYSE: SPOT) stock rose nearly 2.3% in today’s trading hours after KeyBanc Capital Markets’ Justin Patterson upgraded his SPOT rating and expressed a ambitious vision of the long-term potential of the company.
Spotify stock was worth $ 254.72 per share at market close today, and the sum, while reflecting a decline of over 18% since the start of 2021, marks a 2.28% improvement over the day, up 9% over the past week, and about 13 percent gain since early August.
Admittedly, Spotify stock – which approached $ 300 per share in April before dropping to $ 217 per share in May – threatened to drop below $ 200 per share last month, after the Stockholm released its financial statements for the second quarter of 2021 at the end of July. Therefore, in August, Spotify also unveiled a billion dollar share buyback program.
More generally, however, it bears reiterating that SPOT was trading at around $ 150 towards the start of 2020 – down from around $ 115 in October 2019 – and its massive valuation hike appeared to kick off in earnest in May 2020, after Spotify announced an amount of $ 100. million dollars for The Joe Rogan Experience.
Following the aforementioned drop in the aforementioned valuation per share to the $ 200 range, Spotify stock rose significantly last Thursday after Apple eased its “tax” on the App Store. And more recently, SPOT has seen another boost on the heels of KeyBanc analyst Justin Patterson’s initially noted bullish stance.
Patterson raised his overweight SPOT rating and set a price target of $ 340 per share, or roughly $ 85 above the Spotify share value at market close today. Explaining his position, the finance professional highlighted the improvement in Spotify’s ranking (by download volume) on several international app stores, the previously highlighted changes to Apple’s App Store rules and the growth rate of audio entertainment service compared to competing music streaming platforms.
“When combined with favorable application trends and a stronger competitive position, we think Street’s 2022-2023 gross revenue and profit forecast looks overly conservative,” Patterson said. “In our opinion, this makes the risk / reward ratio [Spotify stock] irresistible.”
Despite the drop in stock prices that 2021 has brought for Spotify, some other investors have also argued that SPOT is poised to experience tremendous growth in the months and years to come.
In February, for example, The Guardian Fund, headquartered in Amsterdam, predicted that SPOT will be worth five times as much by 2030, or north of $ 1,750 per share based on the share price at the time. optimistic forecasts. “The value lies in machine learning that drives discovery and engagement, original content from people like Michelle Obama, Kim Kardashian and Joe Rogan, analytics and data distribution for artists,” the executives said from the Guardian Fund.
On these latter fronts, Spotify has continued to make substantial investments in podcasting, including signing a deal with WWE and a multi-million dollar deal with Call her daddy host Alex Cooper this summer. Given the huge sums involved in these and other plays (as well as the seemingly slow audience growth some podcasts are seeing), it’ll be interesting to see how many of Spotify’s over 365 million monthly active users interact with. podcasts in the third quarter of 2021..