Spotify Technology is the IBD Stock Of The Day as the global music streaming leader jumps on multiple catalysts, including a new Taylor Swift album on the way.
On Friday, Deutsche Bank analyst Benjamin Black reiterated his buy rating on Spotify stock, citing a new wave of international price increases. He has a price target on Spotify stock of 775.
Black noted higher-than-expected price increases in Germany, Austria, Australia and Liechtenstein. They should help improve the company's profit margins, he said.
In morning trades on the stock market today, Spotify stock cleared a short-term high of 717.27, providing an early entry for investors. The shares gained 4.9% to close at 732.81.
Spotify stock is in a flat base with a buy point of 785, according to IBD MarketSurge charts. That buy point is also the stock's all-time high, reached on June 27.
Spotify notched that record high after steadily climbing following its mixed first-quarter report.
On July 29, Spotify stock plunged 11.6% after its disappointing second-quarter report. The Stockholm-based company beat estimates for subscribers and users in the second quarter but posted a surprise loss in the period. It also came up short on revenue and with its sales outlook. However, Spotify stock recovered on reports that it was raising prices to shore up its business.
Taylor Swift Could Help Spotify's 'Superfan Tier'
Another upcoming catalyst is the launch of Swift's latest album. The global superstar has started promoting the release her 12th album, called "The Life of a Showgirl," due out on Oct. 3.
Spotify reported in December that Swift's catalog generated over 26.6 billion streams in 2024. She was the most played artist on the service for the second year in a row.
Morningstar analyst Matthew Dolgin told Barron's that Swift's new album could boost Spotify's planned "Superfan Tier," a more expensive premium offering for die-hard music fans with exclusive features such as early ticket access.
Spotify stock is on IBD's SwingTrader stock list.
Spotify stock ranks second out of 20 stocks in IBD's Computer Software-Education/Media industry group, according to IBD Stock Checkup. However, it has a middling IBD Composite Rating of 61 out of 99.
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