Streaming music leader Spotify Technology rose Friday after getting a bullish report from a Wall Street analyst. Spotify stock is near a buy zone.
Guggenheim analyst Michael Morris designated Spotify stock as a "Best Idea." He reiterated his buy rating on SPOT stock and upped his 12-month price target to 400 from 350.
On the stock market today, Spotify stock advanced 2.3% to close at 313.02. Earlier in the session, it rose as high as 316.69.
On June 4, Spotify stock broke out of a flat base at a buy point of 319.30, according to IBD MarketSurge charts. It climbed as high as 331.08 the next day before pulling back and dropping out of the 5% buy zone.
However, in a show of strength, it found support above its 50-day moving average line and didn't close in the 7%-to-8% stock-loss sell zone.
Spotify Stock On SwingTrader List
"We have maintained a buy rating on Spotify since March 2023, reflecting our confidence in both the company's position as the world's streaming audio leader and management's tightened focus on disciplined growth," Morris said in a client note Friday.
He added, "Looking forward, we continue to see an underappreciated value unlock, led by a bundled service strategy that will provide additional consumer choice and pave the way to capitalize on pent-up, industrywide pricing power."
In addition to growing its subscriber base, Spotify will benefit from increased advertising spending on its platform, Morris said.
Stockholm-based Spotify ended the first quarter with 239 million total paying subscribers worldwide. Analysts polled by FactSet expect Spotify to end 2024 with more than 258 million subscribers.
Spotify stock is on the IBD SwingTrader stock list.
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