Spotify price target raised to $365 from $320 at JPMorgan

JPMorgan raised the firm’s price target on Spotify to $365 from $320 and keeps an Overweight rating on the shares. The analyst says the company’ “Year of Monetization” started off with strong execution in Q1. Gross margin strength is being driven by Music and Marketplace gains, Podcast improvement and Advertising, with additional cost efficiencies helping to drive significant operating income growth and meaningfully higher free cash flow in 2024, the analyst tells investors in a research note. The firm says that as Spotify continues to add more value to the product offering, pricing will become an increasingly important revenue driver. JPMorgan is confident in the company’s ability to accelerate revenue growth while meaningfully increasing profitability, and believes Spotify maintains long-term pricing power.