UPDATE: Canaccord Initiates Hold, $13 Target on Pandora Media

Canaccord initiates coverage on Pandora Media Inc.

with a Hold rating and a $13 price target on near-term headwinds. Canaccord says, “We believe Pandora has a defensible spot as the leader in Internet radio, and we believe over time this format will thrive. We expect a backdrop of robust digital music growth, pointing to a large opportunity. Content costs dampen future operating leverage, but our model shows significant sensitivity to advertising monetization per listener hour. If Pandora can match traditional broadcast radio across mobile and desktop, the model would improve dramatically. These positives are offset by near-term headwinds: 1) IPO lockup expiration; 2) mix shift to mobile hurting monetization; 3) Facebook Music launch ramping up anxiety about how the competitive landscape will evolve.” P closed at $10.27 per share on Tuesday.