On Wednesday, TD Cowen updated its stock price target for Spotify Technology SA (NYSE:SPOT) to $356, up from the previous target of $273, while maintaining a Hold rating on the shares. The adjustment followed Spotify's second-quarter results, which aligned with the company's guidance and analyst estimates regarding user numbers and revenue.
Notably, Spotify's gross margin surpassed both the guidance and TD Cowen's estimates, contributing to a stronger bottom line than anticipated.
The analyst from TD Cowen acknowledged the positive outcome, stating that the second-quarter performance was a key factor in revising the price target upwards. The company's management commentary indicated potential for continued margin improvement in the second half of the year, which contributed to the analyst's decision to raise the price target.
Spotify's recent financial disclosure revealed that their user base and revenue figures met the expectations set by their guidance and the estimations made by TD Cowen. The standout aspect of the report was the gross margin, which exceeded the forecasts, suggesting a healthy profitability trend for the digital music service provider.
The raised stock price target to $356 from $273 reflects TD Cowen's revised estimates based on the latest financial data. Despite the increase in the price target, the firm reiterated its Hold rating on Spotify shares, indicating that while the recent performance was positive, the analyst is not altering their long-term investment rating at this time.
In conclusion, TD Cowen's updated stock price target for Spotify reflects a positive adjustment based on the company's solid performance in the second quarter, particularly in terms of gross margin. The firm maintains a Hold rating on the stock, with expectations for continued margin improvements in the latter half of the year.
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