UPDATE: SunTrust Robinson Humphrey Initiates Coverage on Pandora Media

On Monday, SunTrust initiated coverage on shares of Pandora P with a Buy rating and $34 price target. Analyst Robert Peck believes the company will “remain the clear leader in internet radio.” The analyst sees “$2B+ revenue potential driven by monetization, not predicated on user growth, and longer-term optionality given platform scale.” The $34 price target is based on “0.43x 2015 EV/EBITDA/g (0.1x below basket of 20 peers) and equates to 6x EV/revenue, 57x EV/EBITDA, and 74x P/E,” said the SunTrust analyst. Peck sees Pandora increases their share of radio ad spent, which currently sits at two percent, to narrow the gap of U.S. radio listening share, which currently sits at nine percent. The analyst expects mobile CPM “to increase from $2 to ~$5. “Rising mix of video (at $15-$25 CPM) lends further support,” according to Peck. Shares are trading higher by 2.45 percent to $25.93 following the upgrade. Pecks $35 price target implies 35 percent upside from current levels.