Spotify isn't 'Netflix 2.0,' says Deutsche Bank after initiating coverage with a hold

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  1. sniper-academy

    sniper-academy Administrator Staff Member

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    Spotify Technology SA shares are up 1.3% in Thursday morning trading, despite a lukewarm initiation note from Deutsche Bank analyst Lloyd Walmsley, who started coverage with a hold rating. "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 wrote. "We do not think Spotify is Netflix 2.0." Walmsley provided a list of the factors that would make him more upbeat about Spotify, including significant market-share growth, valuable proprietary content, diversification away from the big labels, and a lower valuation. He has a $155 price target on the stock, which recently changed hands near $173. Spotify shares are up 10% so far in June, while the S&P 500 has gained 3.1%.

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