Jefferies cuts BOK Financial stock price target on weaker fees

Jefferies has increased its price target for Spotify Technology SA (NYSE:SPOT) to $620, up from the previous $600. The investment firm maintained its Buy rating on the stock, which is currently trading at $518.76. Spotify's market capitalization stands at $106.65 billion with a P/E ratio of 29.12.

The firm identified several positive factors for Spotify’s third-quarter performance, such as slowing operating expense growth and increased advertising revenue. The company expects to launch an artificial intelligence product in the coming months, which could further boost the stock. Spotify is anticipated to achieve a gross margin of around 33.1% in the third quarter, slightly higher than its guidance of 32.9%.

For the fourth quarter, Jefferies forecasts a margin of 33.7%, which is lower than the Street's expectation of 33.9%.

In terms of financial expectations, the new $620 target translates to a valuation of 26 times Spotify's forecasted free cash flow for fiscal 2027. The firm projects Spotify will generate compound annual growth in free cash flow exceeding 20%. Jefferies reaffirmed its Buy rating for the streaming music service.

According to InvestingPro analysis, Spotify has a strong financial health score of 3.57 and maintains a better balance sheet than many peers, with more cash on hand than debt. Investors can find additional insights in the comprehensive Pro Research Report. Spotify is set to release its third-quarter earnings report soon. Earlier, Bernstein maintained an Outperform rating with a price target of $625, citing Spotify's expanding monetizable products and user engagement as positive indicators.

IndeRes downgraded Spotify's rating to Accumulate from Buy, expressing valuation concerns following a recent rally but raised their price target to $580. They have also revised their earnings estimates for the third quarter and second half. Citizens reiterated a Market Outperform rating with a $625 target, highlighting potential significant growth by 2027 due to new product monetization and a slowing operating expense growth rate.

Options data from Bloomberg indicates that Spotify's stock may see a 9.3% move upon earnings release on October 22.