Spotify Technology’s stock has gained a notable endorsement from UBS analyst Batya Levi. Levi has raised her rating for the streaming audio service from Neutral to Buy, while also increasing her target price from $170 to $274.
Spotify shares have experienced a remarkable surge, rising by 17% this year and an impressive 120% over the past 12 months. In comparison, the S&P 500 has posted gains of approximately 3% year to date, with a 21% increase over the same period.
As of Tuesday, Spotify’s stock closed at $219.53, a modest increase of 0.4%. However, Levi remains optimistic about its future performance.
Levi states in a research note, “We believe that efficiency initiatives will continue to be prioritized, leading to sustained margin expansion and stronger bottom line trends in the coming years.”
While valuation has been a challenge for investors in the past due to the company’s lack of profitability, Levi predicts that Spotify will now gain support in this area. With Ebitda firmly in positive territory and growth comparable to its peers, she believes that Spotify’s valuation will strengthen.
In conclusion, the recent upgrade by UBS analyst Batya Levi has brought further optimism to Spotify’s stock performance, signaling potential for even higher highs.