Why This Analyst Sees 36.5% Upside In Spotify?

KeyBanc analyst Justin Patterson upgraded Spotify Technology SA SPOT to Overweight from Sector Weight with a $340 price target, implying a 36.5% upside.
Industry dynamics for Spotify "appear increasingly favorable, which is underscored by recent app strength," Patterson notes.
Patterson sees improved monetization and unit economics.
Spotify's enterprise value to subscriber discount to Sirius XM Holdings Inc SIRI "appears too wide in the face of monetization and gross margin progress," Patterson adds.
Price Action: SPOT shares traded higher by 3.59% at $257.99 in the premarket session on the last check Tuesday.