Media stocks are set to benefit from advertising spend by politicians, presidential debates and media appearances by presidential candidates during the 2024 election cycle.
Music streaming platform Spotify Technology SPOT could turn out to be one of the underrated winners of the election season if it can grab interviews with both presidential candidates on one of the company’s popular podcasts.
What Happened: Both Vice President Kamala Harris and Donald Trump are rumored to be making appearances on “The Joe Rogan Experience” podcast ahead of the 2024 presidential election.
Trump, who has never appeared on the podcast, confirmed his appearance during an appearance on the “Full Send” podcast.
Harris is rumored to be considering going on the podcast as she continues her media blitz that has included appearances on television and podcasts in recent weeks, targeting multiple different voter demographics.
“The Joe Rogan Experience” podcast, hosted by Joe Rogan, is among the top listened-to podcasts in the U.S. and a major subscriber driver for Spotify. The music company said earlier this year Rogan had 14.5 million followers on the platform. Rogan has been number one on Spotify for four straight years.
Rogan has been exclusive to Spotify since 2020 and earlier this year signed a multiyear renewal worth a reported $250 million.
While Rogan will likely get huge viewership figures ahead of the 2024 election as he talks about political topics and has noteworthy guests, drawing one or both of Trump and Harris, who have never appeared on the podcast, could be among the most highly anticipated shows in his history.
Spotify could stand to benefit as the company might see a boost in subscribers, target advertising dollars and offer bundles ahead of the podcast appearances to take advantage of the interviews.
While Trump has often commanded strong viewership figures for his media appearances, Harris recently helped “The View” post its best ratings in three and a half years. Harris’ appearance on the Oct. 8 episode averaged 3.14 million, marking the most watched episode of the daytime show since Feb. 2021, as reported by Variety.
The strong viewership helped “The View” win the week for total viewers among its peers.
While Trump confirmed his appearance, consumers aren’t convinced Harris will make an appearance with the sometimes controversial Rogan. A prediction market on Polymarket lists a 33% chance of Harris going on the podcast.
On Polymarket, users can deposit funds using USDC USDC/USD via the Polygon MATIC/USD network, or directly from a crypto account with Ethereum ETH/USD. In each betting market, the winning option pays out at $1.
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Spotify Growth Potential: An appearance by Harris and/or Trump on “The Joe Rogan Experience” could help boost the growth prospects for Spotify, but an analyst sees future growth coming without either interview.
KeyBanc Capital Markets analyst Justin Patterson reiterated an Overweight rating and raised the price target on Spotify from $440 to $490.
The analyst said Spotify is “finding the sweet spot of growth and margin.”
Spotify reports third-quarter financial results on Nov. 12, which is coincidentally a week after the 2024 election.
With improved growth and profitability, the analyst raises estimates for several financial metrics ahead of the earnings print.
Patterson sees Spotify reporting net adds of 13 million monthly active users and 5 million premium subscribers.
“Given less disruption from bundles, we believe Spotify could outperform both metrics.”
The analyst said there could be some upside in guidance based on bundle rollouts. Patterson is also bullish on a potential coming catalyst that could be announced by the company soon.
“There are growing signs that a high-end plan will be launched in the coming months.”
Patterson said revenue growth, steady margin expansion and capital returns are all items that could help send Spotify shares higher.
“We continue to believe there is meaningful upside to Street profitability forecasts. We continue to view valuation as compelling.
SPOT Price Action: Spotify shares closed down 0.24% to $371.69 on Wednesday versus a 52-week trading range of $145.76 to $389.23. Spotify stock is up 96% year-to-date in 2024.
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Photo: Courtesy Joe Rogan Experience
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