A second Wall Street analyst on Thursday recommended buying Spotify Technology's stock SPOT, +0.00% which is expected to make its public debut early next week. Analyst Rob Sanderson at MKM Partners started coverage of the Luxembourg-based music streaming company with a buy rating and $200 stock price target, saying he's bullish on the margin opportunity and the expected growth of its target market. "We believe margin leverage comes with [Spotify's] influence on audience and demand generation," Sanderson wrote in a note to clients. "Enabling emerging artists could evolve into a long-term disruptive force for labels, or into a farm-system to enhance labels, but we think either path would be margin accretive for [Spotify]." He said he believes a streaming audio service will eventually reach 80% of smartphone users, which implies a 2.4 billion user total addressable market (TAM) over the next several years. RBC Capital also initiated coverage of Spotify on Thursday with an outperform rating and $220 stock price target. Spotify said earlier this week that it expects to have 198 million to 208 million monthly active users by the end of the current fiscal year, with the midpoint of that range implying a rise of 29% from a year ago. Spotify is going public at a time the Renaissance IPO ETF IPO, +1.24% has gained 1.9% over the past three months, while the S&P 500 SPX, +1.38% has slipped 1.2%.