Spotify: Jefferies still a buyer ahead of results

Published: 2025-07-15 09:08:31 ET SPOT

Published on 07/15/2025 at 09:08

Jefferies confirms its buy recommendation on Spotify shares with an unchanged target price of $845 (cp: $717.5).Jefferies is positive ahead of Netflix's Q2 results, anticipating a likely positive surprise in subscriber numbers, exceeding consensus expectations (+5 million). The analyst also highlights the favorable effects of recent price increases, particularly in Belgium, the Netherlands, and France.The broker explains that its optimism is based on stronger-than-expected revenue growth momentum and the beneficial effects of bundled offerings on profitability. Given our increased optimism about revenue growth and the benefits of bundled offerings, we are forecasting a gross margin of 5% and EBITDA of 10% for fiscal 2026, Jefferies said. The target price of $845 reflects a valuation equivalent to 37x 2026e EBITDA, in line with estimated three-year compound annual EBITDA growth of 38%.