Wolfe Research reiterates Outperform rating on Spotify stock at $790

Spotify (SPOT) is undergoing a leadership transition with founder Daniel Ek moving to Executive Chairman in 2026, and long-time executives Gustav Söderström and Alex Norström assuming Co-CEO roles, a change Wolfe Research views as an "evolution" unlikely to disrupt strategy. Wolfe reiterated an Outperform rating with a $790 price target, anticipating accelerated user growth towards 1 billion and expansion into new content formats. While Goldman Sachs downgraded SPOT to Neutral, other analysts including HSBC, BNP Paribas Exane, and Guggenheim maintain bullish outlooks, citing Spotify's strong market position and product development, with price targets ranging up to $900.

Analysis

Spotify (SPOT) is undergoing a significant, yet strategically continuous, leadership transition with founder Daniel Ek moving to Executive Chairman on January 1, 2026, and long-time executives Gustav Söderström and Alex Norström assuming co-CEO roles. Wolfe Research views this as an "evolution of the existing relationships" rather than a disruptive pivot, anticipating the new leadership will accelerate efforts to grow Spotify's user base towards 1 billion consumers while expanding into audiobooks and video. This outlook is supported by the stock's 97.67% return over the past year and a "GREAT" financial health score from InvestingPro. Analyst sentiment is largely positive but shows some divergence; while Wolfe, HSBC, BNP Paribas Exane, and Guggenheim maintain Outperform or Buy ratings with price targets ranging from $790 to $900, Goldman Sachs has downgraded the stock to Neutral. Goldman's rationale points to a balanced risk/reward profile, even as it slightly increased its price target to $770. The broader bullish sentiment is anchored in Spotify's perceived pricing power, ongoing product improvements, and strong competitive positioning.

Key Decisions for Investors

• Investors should weigh the strong consensus of bullish analyst ratings, which cite a clear path to user growth and content expansion, against the stock's significant 97.67% appreciation over the past year.
• The downgrade by Goldman Sachs to Neutral on a balanced risk/reward basis serves as a key counterpoint, suggesting that investors may want to evaluate if the current valuation fully reflects the positive outlook.
• Monitor the execution of the new co-CEO leadership in accelerating user growth and monetizing new content formats, as this is the central pillar of the long-term investment thesis presented by bullish analysts.