Spotify price target raised to $185 from $165 at BofA

BofA raised the firm’s price target on Spotify to $185 from $165 and keeps a Buy rating on the shares. The firm anticipates Spotify’s Q2 results will largely be in line across the main key performance indicators, such as revenue, premium subscribers and monthly active users, but, “more importantly,” it believes the focus will be on the Q3 guidance for gross margins and operating income given several cost-cutting initiatives the company has undertaken. In that context, BofA anticipates Spotify will reiterate expectations of sequential gross margin improvement throughout the year and the firm also expects the company to increase prices in 2023.