With the launch of Apple Inc. AAPL‘s Apple Music imminent, Albert Fried & Co. analyst Rich Tullo decided to take an in-depth look at streaming music rival Pandora Media Inc P.
Despite Apple’s hyped-up new presence in the streaming music space, Tullo believes that Pandora still has a firm grip on the world of streaming radio.
Competition Heating Up
According to Tullo, Apple Music’s premium pricing doesn’t pose a threat to Pandora and Spotify’s IP radio services for the time being. In addition, Tullo sees Google Inc GOOG GOOGL’s revamped Songza as more of a threat to Spotify than Pandora, as it is track-based (the user selects the song) rather than pure-play radio.
Rate Case
Tullo believes that the outcome of Pandora’s rate case is unpredictable, and the court could decide on rates anywhere between 10 to 30 nano-pennies (NP) per spin. However, he predicts that the most likely outcome is 20 NP, in-line with the rates that Pandora was anticipating prior to an industry rate relief agreement.
Top App
Pandora’s app is also the third highest-grossing app on App Annie, trailing only Clash of Clans ad Game of War-Fire Age.
Outlook
Overall, Tullo sees moderate upside to Pandora’s stock and sees downward price fluctuations as potential buying opportunities. Albert Fried has a Market Perform rating on Pandora and a $19 target for the stock.Image Credit: Public Domain© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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