UPDATE: Piper Jaffray Initiates Neutral, $13 PT on Pandora Media on Challenges Ahead

Piper Jaffray initiates its coverage on Pandora Media

with a Neutral rating and a price target of $13. Piper Jaffray comments, "While Pandora has emerged as the leader in internet radio and has achieved remarkable growth by most metrics, we see challenges ahead for the company. Management has done a commendable job to date establishing its market leading position (and legitimizing the streamed music model for consumers), but we see inherent structural flaws in the internet radio industry, a debatable business model, and the entrance of new competitors limiting options from here. As competition heats up, we expect investors will seek some consolation in Pandora's first-mover and market leading positioning, but this increased scrutiny will likely reveal few of the competitive advantages we see necessary to sustain a profitable leadership role." P closed at $10.49 on Tuesday.