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CRB Ruling Brings Clarity to Pandora (P) - BMO Capital Raises PT to $16

December 17, 2015 7:47 AM

BMO Capital reiterated a Market Perform rating on Pandora (NYSE: P), and raised the price target to $16.00 (from $14.00), after a CRB ruling. The CRB ruled yesterday that streaming rates will be set at $0.17 per 100 spins for ad-supported listening, and $0.22 per 100 spins for subscription-supported listening. The CRB ruling brings clarity to 2016.

Analyst Daniel Salmon commented, "The CRB ruling brings clarity (andlower EBITDA estimates) to 2016, which is now firmly in the “transition year”category. What matters now is execution of the “three-step program:” 1) sign direct deals with the labels; 2) launch the on-demand service in 2H16; and 3) begin the global expansion, likely in 2017. We have been surprised and impressed withthe pace of direct deal signings happening already (Warner/Chappell was addedon Tuesday) confirming that management was not waiting around for the CRBto take action on the future of its content costs. With the Rdio assets within thefold, we believe the on-demand product development is also getting under way. We believe investors can wait to let this strategy unfold over the next severalquarters until confidence (or lack thereof) in the new strategy can be gained. In the meantime, upward or downward catalysts to the stock are likely to be caused bychanges in listener hours (which would beget questions on the competitivelandscape), changes to advertising monetization, and the impact of AMP/Ticketfly."

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 $13.44 yesterday.


Analyst Comments Analyst EPS Change Analyst PT Change

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