KeyBanc Reiterates Overweight Rating on Spotify (SPOT)

KeyBanc analyst Justin Patterson reiterated an Overweight rating and $830.00 price target on Spotify (NYSE: SPOT).

The analyst commented: "We maintain that consensus is understating Spotify's medium-term growth and margin profile. In our view, 3Q earnings should reinforce that: 1) product levers are driving engagement; 2) gross margin is improving into 4Q; and 3) monetization actions phase into the model in 4Q25E and 1Q26E. We believe this sets the stage for high-teens revenue growth in 2026E and 2027E, and we maintain our OW rating and $830 PT (2027E EV/S of 5.8x and EV/FCF of 32.8x).

We make minor changes to our 2025E, 2026E, and 2027E forecasts. Flowing through our changes to 3Q and 4Q, our 2025E revenue declines by 0.2% while operating profit increases by 1%. For 2026E-2027E, our revenue and operating profit forecasts decrease by <1% each due to ARPU phasing. Despite this, our 2026E/2027E operating profit forecasts of €3.14B/€4.25B are 7%/9% above consensus. Our PT of $830 (5.8x 2027E EV/S and 32.8x 2027E FCF) is unchanged."

For an analyst ratings summary and ratings history on Spotify click here. For more ratings news on Spotify click here.

Shares of Spotify closed at $680.44 yesterday.

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