Shares of Spotify Technology SA /zigman2/quotes/207488629/composite SPOT +0.90% are up 1.7% in premarket trading Tuesday after Evercore ISI analyst Kevin Rippey raised his rating to in-line from underperform. "Our bearish view of Spotify and June downgrade had been grounded in the notion that when the stock was trading at ~$150, the market was taking an overly optimistic view of the company's ability to drive gross margin improvement," he wrote. "While we still contend that the path to substantial gross margin expansion for Spotify is unclear, with the stock down >30% from recent highs, the opportunity related to shorting Spotify has diminished." Rippey kept his target price unchanged at $110. Spotify shares have dropped 22% over the past three months, as the S&P 500 /zigman2/quotes/210599714/realtime SPX +0.38% has risen 0.4%.