BofA raised the firm’s price target on Spotify (SPOT) to $900 from $700 and keeps a Buy rating on the shares. The firm, which believes Spotify is at an inflection point in profitability and free cash flow, lowered its Q2 revenue forecast to EUR 4.25B from EUR 4.32B, “entirely related to currency moves,” but maintains its gross margin forecast of 31.5%. The firm, which raised its multiple, notes that its newly-applied multiple represents “a slight discount” to the current multiple for Netflix (NFLX), and added that it believe there is a likelihood of capital returns to be announced by Spotify in the months ahead.
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