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Why Did Pivotal Research Upgrade Spotify Technology SA’s Stock?


In a report released today, Jeffrey Wlodarczak from Pivotal Research upgraded Spotify Technology SA (NYSE: SPOT) to Buy, with a price target of $190. The company’s shares opened today at $157.60.

Wlodarczak wrote:

“We upgraded our rating on Spotify from HOLD to BUY, after the stock materially underperformed the broader markets and the Nasdaq (even taking into account the broad tech weakness the last 2 days) and YE’19 upside in the shares = 25%, even after reducing our YE 19 target price $10 (higher assumed risk-free rate in our discounted cash flow methodology) to $190. We left our forecasts unchanged including our relatively conservative 3Q 3M net new premium MAU’s vs. 2-5M guidance. Google trend data points to closer to 4+M in 3Q. For 4Q we continue to forecast 9M net new premium MAU’s. SPOT REMAINS THE CLEAR GLOBAL LEADER IN MUSIC STREAMING THAT IN OUR OPINION IS ONLY IN THE 3 RD INNING OF A VERY HEALTHY GROWTH TRAJECTORY- Ultimately, we expect most consumers to move to subscription streaming all you can eat model for music consumption.”

According to TipRanks.com, Wlodarczak is a 4-star analyst with an average return of 5.9% and a 50.3% success rate. Wlodarczak covers the Services sector, focusing on stocks such as Liberty Media Corporation Series A Liberty SiriusXM Common Stock, Charter Communications, and Sirius XM Holdings Inc.

The word on The Street in general, suggests a Moderate Buy analyst consensus rating for Spotify Technology SA with a $213.11 average price target, implying a 35.2% upside from current levels. In a report issued on October 9, MKM Partners also maintained a Buy rating on the stock with a $245 price target.

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The company has a one-year high of $198.99 and a one-year low of $135.51. Currently, Spotify Technology SA has an average volume of 1.58M.

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Spotify Technology SA is an innovative digital music service offering music fans instant access to a world of music. The company enables on-demand streaming of audio content and aim to combat music piracy by offering a user experience, while monetizing licensed content with both an ad-supported, free-to-the-user model and a premium, paid model.