Spotify’s momentum is so strong that the streaming company’s market value this week hit nearly $100 billion. The company’s third-quarter financial report showed that cost reductions have brought record profitability. The stock price hit a record high of $489.69 on Thursday (November 14), and the market value briefly exceeded $98 billion. However, the stock fell on Friday (November 15), finally closing at $458.32, valuing the company at $92.04 billion. While the stock is still up 14.5%, it’s down slightly from its previous high.
During the height of the pandemic, Spotify benefited from a boom in streaming stocks as consumers spent more time with audio and video media. Investors are also attracted to its push into podcasting, which offers an opportunity to boost margins on its core music service. But investors eventually grew tired of Spotify’s growth-over-profit mantra, causing the company’s stock price to fall from $387 in February 2021 to under $70 in November 2021. Back again; Spotify’s stock price is up 138% in 2023 and has risen 144% in 2024.
After delivering solid results and showing investors a path to greater profitability, Guggenheim raised his price target on Spotify to $500 from $420 and raised his 2025 operating profit forecast from 2.1 billion euros (22.1 billion) to €2.5 billion (US$2.63 billion). Analysts said management is confident in usage growth and its ability to raise prices and further improve margins. Morgan Stanley raised Spotify to $460 from $430, citing the company’s ability to raise prices further and management’s “commitment to financial discipline and improving profitability.” For the above reasons, JPMorgan analysts raised Spotify’s stock price from $425 to $530. In addition, the stock will be included in the MSCI World Index on November 25.
Many analysts also raised their price targets for Live Nation after the company released a profit report on Monday (November 11), which showed that the company’s third-quarter adjusted operating income hit a record high. Among them: Rosenblatt Securities ($146 from $123), Goldman Sachs ($148 from $132), Benchmark ($145 from $108), Evercore ISI ($150 from $110), Oppenheimer ($155 from $120), and Wolfe Research ($152 from $125). Live Nation shares ended the week at $129.00, up 4.9%, after hitting an intraday high of $130.83 on Friday.
Spotify’s sharp gains were the main reason the Billboard Global Music Index rose 5.8% to 2,162.50, although only six of the 20 stocks ended the week in positive territory. This float-adjusted, unweighted index measures the combined market capitalization of 20 member companies; Spotify is the largest company in the index, with a market capitalization more than twice that of the second-ranked company, Universal Music Group (UMG). The other five gainers this week are among the index’s largest companies: Live Nation, CTS Eventim, JYP Entertainment, HYBE and SM Entertainment all have market caps above $1 billion.
Stocks suffered a post-election hangover this week, causing post-election gains to stall. Donald Trump Won the presidential election on November 5th. Britain’s FTSE 100 fell just 0.1%. South Korea’s KOSPI composite index fell 5.6%. China’s Shanghai Composite Index fell 3.5%.
Despite the decline in the KOSPI, K-pop stocks have gained across the board, and these stocks have recovered in the second half of the year and now have an overall year-to-date deficit of 20.2%. JYP Entertainment rose 8.2%, HYBE rose 3.2%, SM Entertainment rose 2.8%, and YG Entertainment rose 2.7%.
In terms of live broadcasting, Sphere Entertainment Co.’s latest financial report showed that its Sphere division’s revenue slowed down. Macquarie lowered the company’s target share price from $47 to $45, and the stock price fell 8.6%. Earlier this week, Bernstein lowered his price target on MSG Entertainment (MSGE) to $44 from $45, sending the stock down 6.8% to $40.00.
On the radio front, Cumulus Media shares fell 19.3% to $0.71 after reports of layoffs at stations in central Pennsylvania, Indianapolis, Detroit and San Francisco — all — as part of broader layoffs ahead of the holidays. These follow recent layoffs at competitor iHeartRadio. Elsewhere music streamer LiveOne fell 12.4% this week to $0.78.
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