Why is Albert Fried Bearish on Pandora (P)

In a note released earlier today, the analysts at Albert Fried said they believe it is more likely that Pandora will trade to $8 than to $115. This sentiment comes complete with a reiteration of an Underweight rating and $20 price target. The team at Albert Fried is saying that the probability of the US entering a new recession in the next five years is high and suggests it may be time to take profits on high multiple - low earnings stocks. Looking for possible growth, the analysts warned that it may take any where from five to 10 years for Pandora to capture five percent market share from radio. They explained this is due to the large portion of the radio market (~40 percent) represented by Talk, Sports, and News, which are more popular in vehicles. This is important given that less than 40 percent of vehicles on the road today are Pandora ready and the replacement cycle is around nine years. Additionally, the team has concerns over the coming Apple AAPL update which will load Beats onto ~1 billion devices vs. ~280 million for Pandora. Despite the concern at Albert Fried, shares of Pandora are up over 2 percent today.