Deutsche Bank reiterated its Buy rating and $775 price target on Spotify (NYSE: SPOT), saying its analysis continued to support meaningful revenue, margin, and profit acceleration under various pricing scenarios.
The firm estimated that a straightforward $1 per month increase—an 8% price hike—would lift 2026 revenue by ~2%, with a similar impact to gross profit and a 5% increase to EBIT.
If Spotify instead raised only the Premium tier, leaving Music-only pricing unchanged, labels would still receive their contractual wholesale increases (likely low- to mid-single-digit percentage gains), while Spotify would retain most of the incremental $1 per subscriber. Deutsche Bank said this would again add ~2% to revenue, but with 60–70% incremental margins, resulting in a 4% boost to gross profit and a 9% increase in EBIT.
In a more optimistic scenario—which the firm still viewed as “very likely”—Spotify would raise Premium pricing by $2 per month and Music-only pricing by $1 per month. Under this model, Deutsche Bank estimated nearly a 5% rise in revenue, a 10% increase in gross profit, and a 22% expansion in EBIT, assuming historical revenue-share patterns for the Music-only tier and retention of most of the additional Premium-tier revenue.
