Spotify Stock Could Slip, Say Analysts. The Earnings Report Is This Week.

Spotify Technology is a key player in the music industry, but it faces competitive challenges, one analyst team said as it initiated coverage of the music-streaming platform ahead of earnings.

TD Cowen analysts Doug Creutz and Mei Lun Quach initiated coverage of Spotify stock (ticker: SPOT) at Market Perform with a price target of $129 in a Monday report. Shares of Spotify were down 1.4% to $147.88 in premarket Monday trading, and the price target implies about13% downside from that. Coming into Monday’s session, Spotify shares have gained 90% so far this year.

Spotify Technology is a key player in the music industry, but it faces competitive challenges, one analyst team said as it initiated coverage of the music-streaming platform ahead of earnings.

TD Cowen analysts Doug Creutz and Mei Lun Quach initiated coverage of Spotify stock (ticker: SPOT) at Market Perform with a price target of $129 in a Monday report. Shares of Spotify were down 1.4% to $147.88 in premarket Monday trading, and the price target implies about13% downside from that. Coming into Monday’s session, Spotify shares have gained 90% so far this year.

The company has presented multiple profitability targets including 30% music gross margin in the intermediate term, and 35% in the long term, analysts wrote. Investors will be keeping a close eye on these metrics and others when the company reports third-quarter earnings on Tuesday. A majority of analysts are bullish on Spotify stock, with 56% rating it at Buy, and 44% at Neutral, according to FactSet.

Apple stock (AAPL) is 0.9% lower in premarket trading, Amazon.com stock (AMZN) is 0.7% lower, and shares of Alphabet (GOOGL), the parent of Google, are down 0.5%.