Spotify: Optimism Rises as Options Traders Eye Major Stock Upside Before Earnings

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Nike Inc 뉴스

Netflix Inc,Lululemon Athletica Inc,The Technology Select Sector SPDR® Fund

Stocks Analysis by MarketBeat.com (Gabriel Osorio-Mazzilli) covering: Nike Inc, Netflix Inc, Lululemon Athletica Inc, The Technology Select Sector SPDR® Fund. Read MarketBeat.com (Gabriel Osorio-Mazzilli)'s latest article on Investing.com

This sends a message to investors that these trades could be bullish, and Wall Street analysts agree on a double-digit upside.

This is done through stock options, but they have a couple of caveats, such as timing and risk. Investors need to get the direction of the stock right and the specific timing of that move, considering stock options contracts have an expiration date. These two caveats significantly raise the stakes for traders buying these instruments.

Starting with analysts at Pivotal Research, who recently reiterated their"Buy" rating for Spotify stock, investors can do the math for their new price target of $510 a share. This target calls for a net upside of 33.7% from where the stock trades today, not to mention a new all-time high. Then, there are broader markets, sending a clear message to investors. Compared to the business sector's average price-to-earnings valuation of 42.6x today, Spotify stock calls for a significant premium of 149.7x P/E today, and that's one factor investors need to lean on.

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