Shares of Spotify Technology S.A. (SPOT) sank 4.8% in premarket trading Tuesday, to extend the previous session's pullback, after UBS analyst Eric Sheridan swung to bearish from bullish on the music streaming platform, saying future opportunities are "more than priced in." Sheridan cut his rating two notches to sell, after being at buy since April 2018, while raising his stock price target to $204 from $189. On Monday, the stock had rallied as much as 2.6% intraday to an all-time high in early morning trading, then reversed course to close down 6.1%. It was still up 92.2% over the past three months, while the S&P 500 has gained 10.9%. Sheridan wrote in a note to clients that after the recent rally, the stock is "now pricing in the entirety of upside optionality that we model in the coming years ([subscriber] and engagement growth, shift in engagement habits and possible improvement in unit economics)." Although he doesn't see material risk to operating estimates in the coming quarters, he also doesn't see pronounced upside that could expand valuation multiples from current levels.
-Tomi Kilgore; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
July 14, 2020 09:12 ET (13:12 GMT)
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