Albert Fried Comments On Pandora's Long-Term Threat From Apple's Beats

In a report published Thursday, Albert Fried & Company analyst Rich Tullo commented on Apple's AAPL acquisition of Beats and the impact on Pandora Media P. Tullo reiterated a Market Perform rating and $20.00 price target on Pandora. Despite Pandora's growth potential as a “great” service, the analyst remarked “great Companies do not always offer attractive returns for equity investors.” The Albert Fried firm noted that Apple's Beats alone will not influence Pandora's metrics over the next quarter. Tullo sees Pandora monetizing more of its ad inventory over the upcoming quarter. The analyst wrote, “We think the threat is longer term. In 2013 Apple sold roughly 150 million iPhones and 70 million tablets according to Gartner and when combined with IOS updates to older units Apple has the capability to download Beats Music to 500 to 800 million users globally. We think even at a 5% penetration rate 25 to 40 million incremental Beats users have the potential to disrupt Pandora's roughly 76 million monthly users.” Shares of Pandora closed at $25.29 on Wednesday. The stock is about even for the day.