Spotify (SPOT) made more share gains on Thursday after Credit Suisse analyst Brian Russo hiked the music streaming service’s rating to outperform on the prospect of an increase in subscriber numbers in 2021.
Spotify has managed to shake off tech giants Apple (AAPL), Amazon (AMZN) and Google (GOOGL) to remain the industry leader in the audio streaming space, and Russo is expecting its recent focus on podcasts to pay dividends next year.
Spotify is set to launch a number of exclusive podcasts during the next 12 months.
Russo said that he expects Joe Rogan’s podcast series to bring in five million additional subscribers during that time.
He added: “We now see a greater likelihood that major labels will participate in Spotify’s Marketplace and help expand gross margins, a change from our prior view.”
Russo is now more bullish on his Spotify subscriber forecast for next year, adding four million to a new 185 million projection.
He also added $100 to a new $315 price target.
The upgrades boosted SPOT on Thursday as shares ran up 3.6% during the morning to a trading price of $253.72.
Spotify has now made gains of 70% since 1st January.
Morningstar analyst Ali Mogharabi is also optimistic for Spotify, albeit with one or two caveats.
He believes that recent investments to attract more listeners, content providers, record labels and advertisers are working.
However, Mogharabi believes that the big three tech rivals could “pose a threat” in the future.
He also said that a $156 share price offers good value but advised investors to wait for a pullback before jumping in.
Spotify currently has 13 buy, eight hold and six sell ratings, with a consensus at hold.
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