Spotify Stock Sees Uptick Ahead of 3Q Earnings Report as Analysts Raise Price Targets

As Spotify Technology S.A. prepares to release its third-quarter earnings report on Tuesday, November 12, after market close, the company’s stock has seen a significant boost due to optimistic analyst forecasts. Benchmark analyst Matthew Harrigan adjusted the price target for Spotify to $440 from $430, maintaining a Buy rating on the stock. This revision is driven by anticipated increases in Premium revenue, particularly following a pricing adjustment in Canada, which is expected to add approximately €10 million in the fourth quarter of 2024 and €121 million in 2025.

The pricing adjustment and subsequent revenue growth are expected to contribute to stronger operational leverage, supporting the analyst’s operating profit (GAAP) forecast for 2025, which is 9% above consensus. However, the potential gross margin benefits from the price increase are likely to be offset by investments in promoting audiobook engagement on the platform.

Other analysts have also revised their price targets and ratings. Deutsche Bank, Rosenblatt Securities, and KeyBanc Capital Markets have all raised their price targets, citing the company’s robust revenue growth and operational efficiency. Evercore ISI maintained its Outperform rating, predicting third-quarter earnings results that modestly exceed expectations, with a revenue forecast of €4.02 billion.

Institutional investors have also shown confidence in Spotify. Aigen Investment Management LP increased its stake in Spotify by 42.4% in the third quarter, while Perpetual Ltd and Swedbank AB also boosted their holdings. However, Baillie Gifford & Co. reduced its position in Spotify by 3.3% during the same period.

Spotify’s stock has performed impressively, with a 134.34% price return over the past year and is currently trading near its 52-week high. The company’s market capitalization stands at $81.66 billion, reflecting investor confidence in its growth strategy and potential for future profitability.

The upcoming earnings report and the outcome of the Copyright Royalty Board (CRB) litigation related to mechanical royalties and post-bundling leverage are also anticipated to provide further insight into Spotify’s financial trajectory.