2023-03-22 07:12:02 ET
- Guggenheim Securities upgraded Spotify ( NYSE: SPOT ) and Warner Music ( NASDAQ: WMG ) to Buy from Neutral amid analysts saying that the global music industry has the potential for market-leading financial growth over the next several years.
- Spotify price target is set at $155 while WMG price target at $36.
- Analysts led by Michael Morris said there’s “an attractive revenue growth runway for the industry that will exceed current consensus estimates."
- Analysts further add, "See Spotify leadership continuing to recognize incremental efficiency as a value-creating strength that the company can disproportionally benefit from, relative to the broader market."
- SPOT shares trading 2.4% higher premarket while WMG is up by 2.1%.
- In early March, Morgan Stanley said that Spotify has likely captured the "pivot to profitability" message, up 56% YTD, and now it will need to deliver on those expectations, analyst Benjamin Swinburne noted. Meanwhile, Warner Music generated about $1B in revenue from Spotify in FY22 - about 27% of WMG's streaming revenues.
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Spotify and Warner Music upgraded at Guggenheim citing global music industry growth potential