SunTrust's Peck Upgrades Pandora (P) to Buy Ahead of Potential Catalysts
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SunTrust Robinson Humphrey upgraded Pandora (NYSE: P) from Neutral to Buy with a price target of $18.00, ahead of potential catalysts.
Analyst Robert Peck commented, "We are upgrading Pandora to Buy from Neutral ahead of what we think will be a series of positive catalysts: the impending signing of direct deals with music labels; the announcement of new tiered products; and the ability to beat low guidance set by the company. Our 2017 $18 target implies a ~2.3x fwd revenues and ~14x fwd normalized EBITDA multiple."
The analyst notes three probable scenarios optimize risk/reward: 1) the company signs direct deals with labels and rolls out new interactive products; 2) the company can’t sign economically sound deals and pares back investment and spending to focus on core (no M&A); 3) the company doesn’t sign deals and entertains M&A. Our weighted probabilities (75%, 10%, 15%) and associated implied targets center on a $18 2017 target.
Shares of Pandora closed at $13.62 yesterday.
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Related EntitiesSunTrust Robinson Humphrey, Robert Peck
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