Pandora Drops After Wedbush Says Overvalued, Could Face Apple Competition
Shares of Internet radio company Pandora (NYSE: P) slumped on Tuesday following a downgrade from analysts at Wedbush.
Wedbush lowered shares from Outperform to Neutral, citing “lack of near-term profitability” and noting that shares have traded up significantly since mid-November. Wedbush writes that strong earnings from Netflix (NASDAQ: NFLX) and Google (NASDAQ: GOOG) may have bled over into Pandora shares.
Further, Wedbush brings up speculation that Apple (NASDAQ: AAPL) could soon launch its own streaming music service that would compete directly with Pandora. This has been widely speculated for months. Wedbush says it anticipates that the service will launch in early 2013, though they admit they have no details.
Still, Wedbush notes that it remains “optimistic” about the fourth quarter. Analysts actually raised their price target to $11.50 from $10.
Shares of Pandora traded near $11.30 on Tuesday.
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