In a report released yesterday, Benjamin Swinburne from Morgan Stanley maintained a Buy rating on Spotify, with a price target of $800.00.
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Benjamin Swinburne has given his Buy rating due to a combination of factors that highlight Spotify’s potential for significant growth. He points out that Spotify is expected to maintain a robust revenue growth rate in the low-to-mid teens, fueled by ongoing product innovations and increasing market share. Swinburne forecasts a compound annual growth rate (CAGR) of 14-15% for revenue in the base case, with a more optimistic scenario predicting 16-17% through 2028.
Additionally, Swinburne identifies substantial margin expansion opportunities as Spotify enhances its product offerings and implements price increases, particularly within its Premium segment. This strategic approach is anticipated to result in a unique growth trajectory, supported by a subscription model that exceeds 90%. Swinburne projects an EBIT CAGR of approximately 40% through 2028, with expectations that EBIT in 2028 will surpass consensus estimates by over 10%. These factors, combined with the potential benefits from AI integration, underpin his optimistic outlook and the reiterated Buy rating for Spotify’s stock.
According to TipRanks, Swinburne is a 5-star analyst with an average return of 12.0% and a 56.73% success rate. Swinburne covers the Communication Services sector, focusing on stocks such as Spotify, T Mobile US, and Paramount Skydance.
In another report released on October 16, Benchmark Co. also reiterated a Buy rating on the stock with a $800.00 price target.