Target price of $160! Analyst: Spotify may be able to withstand economic downturns.
KeyBanc analyst Justin Patterson reiterated his buy rating on Spotify and raised his target price from $140 to $160.
KeyBanc Capital Markets is becoming more optimistic about Spotify, expecting more room for the streaming music platform's stock price to rise.
On Monday, analyst Justin Patterson reiterated his buy rating on Spotify and raised his target price from $140 to $160.
The analyst cited a recent survey of music platform usage habits among 1,041 American consumers. The proportion of respondents using Spotify rose by 2 percentage points to around 36%.
"We suspect this... reflects Spotify's momentum after the end of the fourth quarter and the continued strong performance of monthly active users (MAUs)," he wrote.
Over the past 12 months, Spotify's stock price has remained relatively flat.
Patterson also said that the likelihood of Spotify users canceling their subscriptions has decreased compared to the three months before the survey.
He said that the strong survey results for the service could enable the company to raise prices in the future.
"Lower cancellation rates indicate that consumers are still sticking to their music plans," he added, which could mean that the service will be able to "resist" potential economic downturns.
Wall Street analysts have mixed views on Spotify.
According to FactSet data, about half of the people rate the stock as "buy" or equivalent, while the other half rate it as "hold".