Spotify stock plunges after KeyBanc cuts SPOT stock price target – here's what investors need to know ahead of earnings tomorrow

Spotify stock price target: Spotify’s stock is drawing fresh attention from Wall Street as analysts revisit price targets following a sharp recent selloff.

Spotify stock slides as analysts revise price targets

KeyBanc has cut its price target on Spotify (SPOT) to $720 from $830, while keeping its Overweight rating unchanged, as per a report. The move comes with Spotify shares trading around $420.04, down nearly 17% over the past week and sitting close to their 52-week low of $405.

SPOT stock prediction: KeyBanc cuts Spotify price target to $720

According to KeyBanc analyst Justin Patterson, the lower target reflects foreign exchange headwinds that are expected to pressure Spotify’s revenue and free cash flow outlook for 2026 and 2027, as per an Investing.com report. Despite those challenges, the firm stressed that its long-term view on the stock remains positive.


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Is Spotify stock undervalued after the recent drop

KeyBanc said the recent decline has pushed Spotify’s valuation to levels that appear excessive relative to its fundamentals.

The stock is currently trading at about 15.3 times estimated 2027 enterprise value to free cash flow, a multiple the firm considers overdone. As per InvestingPro data, Spotify is showing a P/E ratio of 53.2 and a PEG ratio of 0.56.

KeyBanc sees pricing power and AI-driven efficiency at Spotify

The firm continues to see upside drivers in Spotify’s business. KeyBanc believes pricing power remains intact and said artificial intelligence is helping the company accelerate product development while improving operating efficiency.

How Spotify’s profit outlook compares with Wall Street estimates

Even after revising forecasts lower, its operating profit estimates still sit above consensus, running 1% higher for 2026 and 5% higher for 2027.

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Goldman Sachs, UBS, Jefferies reaffirm bullish stance on Spotify

Other firms have also adjusted their targets and ratings. Jefferies reiterated its Buy rating ahead of Spotify’s earnings, citing optimism around fourth-quarter performance and conservative gross margin expectations.

Goldman Sachs upgraded Spotify from Neutral to Buy and set a $700 price target, pointing to long-term growth potential.

UBS reaffirmed a Buy rating after Spotify announced price increases across its US Premium plans, including Individual, Duo, Family, and Student tiers.

Benchmark maintained its Buy rating but lowered its price target to $760, citing expectations for operational leverage and incremental pricing in 2026.

Spotify expands beyond audio with physical books partnership

Spotify has also expanded its strategy beyond audio. The company recently announced a partnership with Bookshop.org that will allow Premium subscribers in the US and UK to purchase physical books directly through the Spotify app starting this spring.

Spotify earnings report scheduled for February 10

Investors now turn their focus to Spotify’s upcoming earnings report, scheduled for Tuesday, February 10, 2026 and analysts are expecting the company to report earnings per share of $2.95, as per a Benzinga report.

FAQs

Why did KeyBanc lower Spotify’s price target?
KeyBanc cited foreign exchange headwinds impacting revenue and free cash flow expectations.

What role is AI playing at Spotify?
AI is helping speed up product development and improve operational efficiency.