Although average revenue per user, weak ad trends and FX headwinds softened its second-quarter results and guidance, Spotify (NYSE:SPOT) does have catalysts ahead, according to Rosenblatt Securities.

The Spotify Analyst: Mark Zgutowicz reiterated a Buy rating on Spotify and raised the price target from $275 to $325.

The Spotify Thesis: Spotify’s newly announced 13 European markets, with the largest in Russia, could present a “potentially meaningful cushion” in the years ahead, Zgutowicz said in a Wednesday note. (See his track record here.)

The analyst named the following as potential "flywheel" effects for Spotify:  

• Podcast consumption (time spent) should begin tracking to respective engagement. 
• More exclusives equals more engagement, which equals lower churn and higher subscription and ad revenue. 
• Subscription pricing leverage inside a two-year window. 

“We acknowledge the importance of a steady upward share trajectory, which is not easy to come by in a crowded US paid market,” the analyst said. 

SPOT Price Action: Spotify shares were down 1.99% at $256.99 at last check Thursday.