Benzinga | Sep 7, 2021 07:31AM EDT

Why This Analyst Sees 36.5% Upside In Spotify?

* KeyBanc analyst Justin Patterson upgraded Spotify Technology SA (NYSE:SPOT) to Overweight from Sector Weight with a $340 price target, implying a 36.5% upside.

* Industry dynamics for Spotify "appear increasingly favorable, which is underscored by recent app strength," Patterson notes.

* Patterson sees improved monetization and unit economics.

* Spotify's enterprise value to subscriber discount to Sirius XM Holdings Inc (NASDAQ:SIRI) "appears too wide in the face of monetization and gross margin progress," Patterson adds.

* Price Action: SPOT shares traded higher by 3.59% at $257.99 in the premarket session on the last check Tuesday.