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Citi Sees Gross Margin Expansion Ahead For Spotify

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  • Citi analyst Jason B. Bazinet noted that Spotify Technology S.A. (NYSE: SPOT) has been building a broader audio platform that spans both Music and Podcasts for several years.

  • He noted that these investments have not helped or hurt gross margins.

  • However, with larger tailwinds from Marketplace and smaller headwinds from Podcasting, he expected gross margin expansion in 2023 and beyond.

  • All of which should be bullish for the firm’s equity value.

  • Bazinet reiterated a Buy on the stock.

  • Last week, Wells Fargo upgraded its rating on the stock following its June 2022 investor day.

  • Raymond James had also upgraded the stock. He saw the competitive landscape in streaming music was largely stable versus Netflix, Inc (NASDAQ: NFLX).

  • Price Action: SPOT shares traded higher by 3.20% at $102.51 on the last check Thursday.

Latest Ratings for SPOT

Date

Firm

Action

From

To

Mar 2022

Deutsche Bank

Initiates Coverage On

Hold

Feb 2022

B of A Securities

Maintains

Buy

Feb 2022

Wells Fargo

Maintains

Underweight

View More Analyst Ratings for SPOT

View the Latest Analyst Ratings

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