Pandora (P) Underweight Rating Reiterated at Albert Fried; Analyst Warns About Impact of Disruption

Albert Fried & Company reiterated an Underweight rating on Pandora (NYSE: P) with a price target of $20. Analyst Rich Tullo discussed weak album sales a potential push-back from artists. In his view, this will eventually lead to high content costs.

"Sales of recorded music are at the lowest level ever recorded and we view this trend the result of secular disruption as disruption protected live tours generate strong revenue. Today popular artists generate tens of million of views on what we call post disruption platforms such as You Tube and Vimeo. Digital Video revenue sharing is superior to Pandora and Spotify thus we predict Artists will demand comparable economics from Streamers," said Tullo.

"Album sales on digital platforms (iTunes) and disks fell to a 3.97 unit weekly average as compared to 4.5 million units last quarter. Not so long ago, the weekly sales pace was 5 million units. Today’s album sales pace is the lowest level recorded by the industry since they started keeping weekly statistics over 25 years ago," he added. "Music Artists such as Billy Joel, Michael Waters, Katey Perry and others will push hard for Higher Sound Exchange Rate Card Payments. We also think they will push for the right to pull their own performances from the Sound Exchange. Thus we expect negative news flow for Pandora as investor concerns about costs are raised and contrary to the status quo line that suggests Pandora will get rate relief from the CRB."

For an analyst ratings summary and ratings history on Pandora click here. For more ratings news on Pandora click here.

Shares of Pandora closed at $27.43 yesterday.

You May Also Be Interested In

• Boston Beer Company (SAM) PT Lowered to $325 at Jefferies
• Verona Pharma (VRNA) PT Raised to $34 at BTIG
• JPMorgan Upgrades Samsung SDS Co Ltd (018260:KS) to Overweight