SPOTIFY : BofA, more optimistic, raises its target
March 20, 2024 at 12:15 pm EDT
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Bank of America announced on Wednesday that it had raised its price target for Spotify from $265 to $315, while reiterating its Buy recommendation on the stock.
In a research note, the research firm hails the restructuring initiated by the online music giant since the beginning of 2023, which has enabled it to drive a favorable trajectory in terms of margins and cash flow.
According to BofA, this inflection point - which has supported the share price over the past 18 months - should continue, thanks to the arrival of new subscribers, price increases, the development of advertising revenues associated with podcasts and the more general improvement in its operating leverage.
In addition, adds the analyst, the company's improved cash flow combined with a solid balance sheet should pave the way, following the forthcoming appointment of a new CFO, for a share buyback program that could act as a catalyst as early as the second half of the year.
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Spotify Technology SA a Luxembourg-based company, which offers digital music-streaming services. The Company enables users to discover new releases, which includes the latest singles and albums; playlists, which includes ready-made playlists put together by music fans and experts, and over millions of songs so that users can play their favorites, discover new tracks and build a personalized collection. Its users can either select Spotify Free, which includes only shuffle play or Spotify Premium, which encompasses a range of features, such as shuffle play, advertisement free, unlimited skips, listen offline, play any track and audio. The Company operates through a number of subsidiaries, including Spotify LTD and is present in over 20 countries. Its service offers a music listening experience without commercial breaks.