Pivotal Research analysts raised their price target for Spotify (SPOT) shares from $330 to $390 in a report released on Friday, while continuing to recommend buying the stock.
The research firm stated that the primary reason for the increase in the highest price target in the market was mainly due to the company’s increasing revenue from premium subscriptions and, to a lesser extent, higher estimates for Average Revenue Per User (ARPU) from advertisements.
“We revised our forecasts for 2024 and beyond primarily by raising our ARPU estimates. Compared to our previous forecast of €5.07, we estimate that monthly premium ARPU will be €5.27 in 2028. Pivotal analysts note that this forecast may still be conservative.
The analysts also mentioned Spotify’s recent hiring of an experienced Chief Financial Officer from defense company Saab AB, praising Christian Luiga’s expertise. They expect Luiga to enhance the company’s cost efficiency measures.
“Pivotal analysts say, ‘Spotify is expected to experience significant growth in revenue generation and substantial growth in free cash flow from 2024 onwards,’ adding, ‘Especially, it seems that the rate of revenue generation is increasing faster than expected, as recent news about price increases also indicates.'”
source: aa.com.tr/ prepared by Melisa Beğiç