SI=-2%, I=5
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Monness, Crespi, Hardt lowered Spotify’s rating to “neutral” from “buy” due to a downturn potential.
“Spotify is riding a favorable long-term trend, enhancing its platform, tapping into a large digital ad market, expanding its audio offerings, and improving its cost structure; however, competition is fierce, margins thin, and we believe the darkest days of this downturn are ahead of us,” Analyst Brian White wrote.
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White added that the upcoming price hikes could be negative to the consumers, and thus, the company.
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White expects Spotify’s third-quarter revenue to grow by 9% y/y to €3.32B, slightly below analyst’s estimate of €3.334B.
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He expects its monthly active users to grow 26% to 574M.