Pandora (P) PT Raised to $14 at Mizuho; One of Most Likely to be Acquired
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Mizuho Securities analyst Neil Doshi raised his price target on Pandora (NYSE: P) to $13.00 (from $11.00) but maintained a Neutral rating. The target was increased on the new direct deals, as well as its potential as an M&A target.
"Given that Pandora announced that it signed direct deals with Sony, Universal, Merlin, and 30+ indie labels for its ondemand product, we believe that a partial overhang has been lifted from the stock," Doshi said.
The analyst views Pandora as one of the most likely to be acquired.
"On the Internet side, we believe that Apple (NASDAQ: AAPL) or Google (NASDAQ: GOOGL) could be the most likely candidates to buy Pandora," Doshi commented. "For Apple, Pandora could be a nice complement to its on-demand music product which now has 17 million subscribers. Furthermore, we’d note that Apple’s acquisition of Beats has not yielded any real success on the subscription side, so a Pandora deal could make sense. For Google, Pandora could give the company access to a large listener base and help jump start its Play Music initiative. Furthermore, Pandora can generate new streams of revenue for Google, and can potentially plug into Google/Doubleclick’s network for ads. Finally, we note that Liberty Media (NASDAQ: LMCA) and Sirius XM (NASDAQ: SIRI) would be likely. With attractive valuation, activist investors involved, and new product launches, including a possible $5/month plan, we think Pandora could be a potential win-win for investors."
Shares of Pandora closed at $14.10 yesterday.
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