Shares of Spotify Technology hit a new high of $180.02 on Thursday after Deutsche Bank initiated coverage on the stock.
Analyst Lloyd Walmsley of the firm started coverage on the stock with a “hold” rating and a price target of $155. Considering that this is well below the share price of where Spotify closed on Thursday, it’s curious that Wall Street was this excited.
The analyst wrote, “We are bullish on the music industry but struggle with the bull case on Spotify given its lack of content differentiation or visibility around long term margins.”
He also made sure to point out, “We do not think Spotify is Netflix 2.0.”
According to the analyst, the firm could turn more bullish on the stock if the company can satisfy these four conditions: Considerable market share growth, the introduction of new proprietary content that consumers value, diversification away from the major music labels, and a pullback in the stock’s valuation.
Disclaimer: We have no position in Spotify Technology S.A. (NYSE: SPOT) and have not been compensated for this article.