Analysts at Pivotal Research raised the Spotify (NYSE:SPOT) price target to $390 from $330 per share in a note Friday, maintaining a Buy rating on the stock.
The research firm said the increase of the already Street high target was driven by primarily the company's higher premium and to a lesser extent ad supported ARPU forecasts.
"We raised our '24 and beyond forecasts driven primarily by increases in our ARPU assumptions, including €5.27 in premium monthly '28 ARPU vs. €5.07 previously, which arguably could prove to be conservative," explained analysts at Pivotal.
They also pointed to Spotify's "solid new CFO hire with excellent experience from the defense company Saab AB." They believe Christian Luiga should help boost the company's efficiency efforts.
"Spotify is poised to see a dramatic acceleration in monetization in 2024, highlighted by a massive ramp in free cash flow," argue analysts at Pivotal. "Importantly, given what appears to be faster than anticipated price hikes, based on press reports, the monetization pace appears to be accelerating."