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Spotify: Neil Young, Joe Rogan and Upcoming Earnings

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Spotify (SPOT) has been hogging the headlines recently, after Neil Young warned and then came good on his promise to remove all his music from the service unless Spotify took prize asset Joe Rogan off the air. Young has accused the JRE podcast host of being responsible for the spread of false information regarding Covid-19 on his show - specifically about vaccines. Spotify has stuck with Rogan and in the meantime the “ban Spotify” bandwagon could be gathering steam after Joni Mitchell joined Young in boycotting the service.

For their part, Spotify has now said that in an effort to combat misinformation, content advisories will be on tap for any conversation centering around Covid. Nevertheless, the saga is bound to be a focal point for investors.

Assessing the situation, Monness’ Brian White believes the “future of the JRE podcast on Spotify is becoming less clear by the day.”

All of this comes as the company prepares to report fourth-quarter earnings on Wednesday, February 2.

The report also comes during a time which White considers an “unforgiving tech tape,” and follows in the wake of Netflix’s “troubling” net addition outlook which has “cast a cloud of suspicion over the Spotify story.” “Looking forward,” said the 5-star analyst, “We wonder if a weaker-than-expected global economy is to blame for Netflix’s woes and the impact this could have on Spotify’s Premium Subscriber additions in 2022.”

We’ll have to wait until Wednesday to find out whether trouble lies ahead, but a look at SPOT’s monthly users during the quarter bodes well for Q4’s display. Unique Visitors (UVs) increased sequentially by 20% from 311 million to 374 million, while growing year-over-year by 17%.

Overall, White expects Spotify will meet his 4Q21 revenue estimate of €2.646 billion and loss per share forecast of €0.39. Street has revenue at €2.652 billion and a loss per share of €0.42.

Sensing an ominous guide, and underpinned by “fears of the unknown,” the analyst has lowered the price target from $380 to $240. Still, there’s upside of 23% from current levels. White’s rating stays a Buy. (To watch White’s track record, click here)

Turning now to the rest of the Street where most analysts agree SPOT is a Buy – 6, in total – which with the addition of 1 Hold makes for a Strong Buy consensus rating. The average price target is a bullish one; at $278.33, the figure suggests shares will climb ~43% in the year ahead. (See Spotify stock forecast on TipRanks)

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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.