News of a Spotify (SPOT-1.3%) price increasegoosed the company's shares yesterday, and while analyst reaction was mostly positive,there were some notes around risks to subscription gains.
Bullish Rosenblatt is on the positive side of the increases. They're "just the beginning of new revenue lift initiatives over the next 24 months," it says. The firm has a $425 price target, implying 44% upside.
Jefferies sees the price increases as positive as they bolster Spotify's identity as a platform rather than just a streaming service (meaning stickier customers, and more pricing power). But the price moves are interesting particularly given Apple's recent inroads into podcasting, calling for keeping an eye on churn. The firm has its price target at $360.
And KeyBanc rates it Sector Weight; while the move illustrates some pricing power, it could mean a hit to user growth: "We suspect management is contemplating a lower than normal net subscriber add quarter."
The company is set to report earnings before the open tomorrow;consensus estimates are for EPS of -$0.51 on revenues of $2.6B.
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