UPDATE: Morgan Stanley Downgrades Pandora Media on More Balanced Risk/Reward

In a report published Friday, Morgan Stanley analyst Scott Devitt downgraded the rating on Pandora Media P from Overweight to Equal-Weight, and removed the $25.00 price target. In the report, Morgan Stanley noted, “We downgrade P shares to Equal-weight as we view risk / reward as more balanced in the near term. Pandora's FQ3:14 results were solid across the board but we did not see the type of ad revenue growth that we think is necessary to drive multiple expansion over the next 6-12 months. We would become more positive if: 1) the STRATA / Mediaocean integrations accelerate the flow of ad dollars to Pandora vs. the gradual shift today, 2) connected device and / or automotive integrations reaccelerate listener hour growth, 3) international expansion through existing markets (Australia / New Zealand) or yet-to-be-entered regions (UK / Western Europe / Canada / South America) becomes material to user growth, or 4) we see cost structure improvements such as direct deals or a favorable 2015 CRB decision.” Pandora Media closed on Thursday at $29.68.