Expect more upside for Spotify stock this week after analysts upgrade

Expect more upside for Spotify [NYSE: SPOT] stock this week after major analysts shifted from cautious to bullish. Spotify ended last week at $122.57, up 21.75% since the streamer offered a mixed Q4 report on Tuesday.

The stock was up slightly in pre-market trading Monday.

Wells Fargo and Atlantic Equities analysts raised the streamer to Overweight after the market closed on Friday. Wells Fargo raised the target for Spotify shares to $180 per share from $121, citing the streamer’s commitment to margin improvement is picking up pace.

“When we upgraded SPOT to Equal Weight, it was predicated on management showing progress against margin targets… we think SPOT will be break-even in 1Q24,” wrote Wells Fargo analysts.

Atlantic Equities analysts raised Spotify’s target price to $160 from $110 per share.

Analysts and investors have been encouraged by record user growth and CEO Daniel Ek’s pledge to trim spending after the streamer’s losses ballooned 44%.

Spotify ended last year with 489 million monthly users, including 205 million paid subscribers. But operating costs jumped 44%, and Q4 losses widened to $282 million, up from $42 million in 2021. Spotify is now the first music streaming service to have more than 200 million paid subscribers. The total net addition of 33 million users was Spotify’s largest Q4 growth ever.

Read Hypebot’s full coverage of the Q4 2022 Spotify earnings report and call here.

Bruce Houghton is the Founder and Editor of Hypebot and MusicThinkTank, a Senior Advisor at Bandsintown, President of the Skyline Artists Agency, and a professor for the Berklee College Of Music.