Spotify (SPOT) Shares Likely Range Bound - Morgan Stanley

Morgan Stanley analyst Benjamin Swinburne reiterated an Overweight rating and $350.00 price target on Spotify (NYSE: SPOT) after the company reported strong 2020 results but offered guidance that seems overly conservative..

The analyst stated "2021 guidance, however, leaves us a bit hesitant to extrapolate the 2020 success into the future. Specifically, guidance for a YoY decline in Premium net additions and the argument that 2020 growth pulled forward from 2021 leaves us with three questions: First, is this business maturing faster than we think (have net adds peaked)? Second, if podcasting is working, where's the evidence in 2021? Third, with a 40% organic advertising growth rate in 4Q flowing into 2021, an expansion of price increases into 25 more markets, and further growth in marketplace benefits, where's the operating leverage?" The analyst concludes that these issues will be resolved with time but also states "Stepping back, the long-term market opportunity and Spotify's leadership position appear intact. Near-term, shares may be range bound until user growth re-accelerates or margins begin to expand".

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 $320.00 yesterday.

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