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Pandora (P) Could See Downside as iTunes Radio Ramps, Thinks Analyst

August 20, 2013 11:48 AM EDT
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Price: $8.38 --0%

Rating Summary:
    8 Buy, 26 Hold, 3 Sell

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Today's Overall Ratings:
    Up: 13 | Down: 10 | New: 10
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Pandora (NYSE: P) will report second quarter fiscal year 2014 financial results on Thursday, August 22, 2013, after the close of the market. Analyst Rich Tullo of Albert Fried & Company likes the company but is cautious and he worries investors may be underestimating the impact of Apple's (Nasdaq: AAPL) iTunes Radio.

"We think iTunes radio is an inferior radio platform (to Spotify and Pandora) but owing to its economics, we argue iTunes Radio ramp could be stronger then most investors expect. As artists receive a % of iTunes Radio revenue we think the iTunes platform will benefit from artists promoting the service," said Tullo. "iTunes radio could also benefit from strength in Appleā€™s (AAPL, NC) new product launches in 2H13E which could include new tablets, phones, and TV's."

"Pandora offers a great service and revenue growth potential. However, great Companies do not always offer attractive returns for equity investors. In this case given the roughly 10% downside to our $18 Target we think Pandora is a tentative hold and the easy money was already earned by value investors," added the analyst.

Albert Fried & Company has a Market Perform rating on Pandora with a price target of $18.00.

For an analyst ratings summary and ratings history on Pandora (NYSE: P) click here. For more ratings news on Pandora click here.

Shares of Pandora closed at $21.17 yesterday.


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