UPDATE: Guggenheim Upgrades Spotify (SPOT) to Buy
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Guggenheim analyst Michael Morris upgraded Spotify (NYSE: SPOT) from Neutral to Buy with a price target of $265 (from $245).
The analyst commented, "We maintain our view that Spotify has established a sustainable position as the global audio industry leader. Our prior concern was that investor expectations left modest upside for share performance. We now see shares as more attractively priced for their long-term growth potential, which we anticipate will be driven by a best-in-class user experience, industry-leading product innovation and growing content differentiation via podcasting and voice chat. Over the coming quarters, we see modest premium pricing power (as reflected in ARPU stability), advertising growth and gross margin expansion as potential catalysts. Longer-term, we believe that the company has opportunities to drive deeper engagement in cars and in local markets (both domestic and internationally), which we believe remains under-appreciated in consensus forecasts. We raise our price target to $265 from our prior $245 and upgrade the shares to BUY from Neutral."
Shares of Spotify closed at $223.32 yesterday.
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