Both Canaccord Genuity and Stifel waxed optimistic on the Wall Street newcomer
Shares of Spotify Technology (NYSE:SPOT) are trading higher this morning, after the streaming music service received a pair of bullish brokerage notes. Canaccord Genuity initiated coverage on the Wall Street newcomer with a "buy" rating. What's more, the brokerage firm said SPOT stock deserves "premium valuation" and set a $200 price target -- a nearly 39% premium to last night's close -- while signaling expectations for global subscribers to grow to around 55% by 2025 versus the current 40%-45%.
Stifel also started SPOT stock with a "buy" rating, and set its price target at $180. The brokerage said it thinks the company can reach profitability, and that, "Similar to Netflix when the company was early on in its transition from DVDs to streaming video, Spotify's margin structure appears far from optimized today."
The shares first began trading on the New York Stock Exchange (NYSE) on Tuesday, though the company chose to go with a rare direct listing, versus pricing an initial public offering (IPO). While the NYSE set a reference price of $132 per share on Monday, Spotify opened Tuesday's trading at $166.47 -- rising as high as $169 on its first day, before closing at $149.94.
Yesterday, the shares fell as low as $135.51, before closing the session down 2.7% at $145.87. Out of the gate this morning, SPOT stock is up 3.3% to trade at $150.63.