Jefferies analyst Andrew Uerkwitz downgraded Spotify to Hold from Buy with a price target of $95, down from $115. The analyst says that with a potential recession looming, he’s looking for safety and media names that have "downside de-risked." Uerkwitz’s long-term Buy thesis on Spotify was that audio service convergence would happen, leading to better margins. It appears convergence is happening, but much slower than expected, Uerkwitz writes. He does not see the company’s gross margins returning to 2021 levels until 2024 and above 30% well beyond that.
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