Wells Fargo Upgrades Spotify (SPOT) to Overweight, 'Off Margin Probation'

(Updated - February 6, 2023 5:02 AM EST)

Wells Fargo analyst Steven Cahall upgraded Spotify (NYSE: SPOT) from Equal Weight to Overweight with a price target of $180.00 (from $121.00).

The analyst comments "Coming off of margin probation. When we upgraded SPOT to Equal Weight it was predicated on management showing progress against margin targets. Opex is demonstrating leverage as OI losses improve, and we think SPOT will be break-even in 1Q24. And, this is during an ad recession so podcasting is likely a bit behind. We see margins and valuation as upward bound with margin delivery rerating SPOT. We're ahead of Street on gross and op margins for '23-'25 (e.g. '24 OM/GM 28%/2% vs Street 27%/-0.4%)."

For an analyst ratings summary and ratings history on Spotify click here. For more ratings news on Spotify click here.

Shares of Spotify closed at $121.17 yesterday.

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