Morgan Stanley Reiterates Overweight on Spotify, $590 Target

Morgan Stanley analysts reaffirmed their bullish outlook on Spotify (SPOT) in a research note today, reiterating an Overweight rating and a $590 price target. The new target implies more than 30% upside from current trading levels.

Rating Change

• Previous Rating: Overweight
• Current Rating: Overweight (unchanged)
• Previous Price Target: Not disclosed
• New Price Target: $590

Analyst Rationale

In a note titled "Investor Day Preview: Don't Stop Believing," the analysts argue that Spotify has earned significantly more credibility with investors due to improved profitability and subscriber growth. They expect the upcoming Investor Day to provide further clarity on the company's long-term strategy, potentially boosting market confidence.

Context

This positive reaffirmation comes as Spotify's stock has performed strongly recently, rising over 20% in the past three months. Other analysts covering the stock are cautiously optimistic, with price targets ranging from $500 to $620.

Conclusion

Morgan Stanley's reiteration underscores its conviction in Spotify's growth potential, especially ahead of the Investor Day. However, investors should weigh potential risks such as intense competition and content costs before making decisions.