Spotify (NYSE:SPOT) stock is on the move Wednesday after Deutsche Bank analyst Benjamin Black upgraded the company’s shares after its latest earnings report.
The Deutsche Bank analyst upgraded SPOT stock from a “hold” rating to a “buy” rating today. To put that in perspective, the analysts’ consensus rating for SPOT shares is “moderate-buy” based on 21 opinions.
To go along with this upgrade, Black also increased his price target for SPOT stock to $180 per share. That represents a potential upside of 28.3% over the next year. It’s also above the analysts’ consensus price prediction of $165 per share for SPOT.
What’s Behind The Bullish Upgrade For SPOT Stock
Here’s what the Deutsche Bank analyst said about the streaming company in a note to clients obtained by CNBC.
“While we think improved headline royalty rates are unlikely, we do think lower per-stream guarantees on the ad-supported side and perhaps higher marketplace commitments remain a real possibility, which could potentially present a gross margin upside catalyst from the 4Q onward.”
Black’s upgrade for SPOT stock comes despite an earnings miss. The company’s EPS and revenue came in at -$1.55 and $3.18 billion. Both of those failed to reach Wall Street’s estimates of -58 cents per share and $3.2 billion. That sent shares lower yesterday, which the Deutsche Bank argues makes for a good entry point into SPOT stock.
SPOT stock is up 1.4% as of Wednesday morning and is up 71.4% since the start of the year.
There’s even more stock market news that traders will want to read about below!
We have breakdowns of all the biggest stock market stories worth reading about on Wednesday! A few examples of that include why shares of Boeing (NYSE:BA), Snap (NYSE:SNAP), and MaxLinear (NASDAQ:MXL) stock are on the move today. All of that news is ready to go at the following links!
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On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
