Spotify stock falls after Evercore turns bearish

Spotify Technology SA shares are down 3.7% in premarket trading Monday after Evercore ISI analyst Kevin Rippey downgraded the stock to underperform from in-line. "We simply do not see a path by which Spotify can generate the level of gross profit demanded by Street estimates over the medium-term," he wrote. "Consumers enjoy streaming music, and there's little content differentiation between platforms. Therefore, labels' willingness to cede economics to Spotify in a manner that would satisfy estimates is very limited in our view." Rippey also argued that Spotify might see smaller-than-expected upside from newer initiatives like paid promotions and podcasts. He lowered his price target on the shares to $110 from $125. Spotify's stock has gained 31% so far this year, as the S&P 500 has risen 18%.

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