Spotify shares will thrive because the music streaming company will generate strong user growth over the next five years, according to J.P. Morgan Chase.

The bank initiated coverage of Spotify shares with an overweight rating, saying its prospects are similar to Netflix.

"Spotify is the largest pure play music streaming service, and is both driving and benefitting from the ongoing secular shift from a 'transaction-based' model to an 'access-based' streaming model," analyst Doug Anmuth wrote in a note to clients Monday.

"We believe Netflix is the closest operating comp to Spotify, as both benefit from the secular shift to streaming through subscription based models. Both Spotify and Netflix are underpenetrated in their markets, and we expect secular shifts in both audio and video markets towards streaming to drive double-digit user growth for both."

Anmuth started his price target for Spotify's stock at $190, which is 19 percent higher than Friday's closing price.

The analyst said Spotify expanded its monthly active user base by 38 percent annually over the last three years. He predicts the company will be able to generate more than 20 percent annual user growth over the next five years.

Evercore ISI also initiated coverage of Spotify shares with an outperform rating, citing its dominant position in the streaming music business.

"As the market leader in music streaming, we view SPOT as having significant potential growth within a large and growing global addressable market," analyst Anthony DiClemente wrote in a note to clients Monday. "With users and subscriber growth ahead of all other platforms in our coverage group and global penetration rates of streaming subscriptions still relatively low, we believe Spotify maintains a long runway for subscriber additions."

DiClemente's price target for Spotify shares is also $190.

The company's stock closed up 1.1 percent Monday.