Market Overview

Pandora Investors: This Isn't The Deal You Were Waiting For

Share:
Pandora Investors: This Isn't The Deal You Were Waiting For

Pandora Media Inc (NYSE: P) announced in early May that management is exploring strategic alternatives, including a sale of itself. The company followed through on its pledge but take action and improve its business — although the outcome wasn't as many had hoped for.

Pandora's announcement last week of a strategic investment from Sirius XM Holdings Inc. (NASDAQ: SIRI) and a sale of Ticketfly prompted Oppenheimer's Jason Helfstein to downgrade the stock from Outperform to Perform while removing a prior $14 price target.

SiriusXM's strategic investment will help the streaming music provider refocus on the core advertising strategy, Helfstein argued. But there will be a transition period in which Pandora's management will need to:

    1. Finalize and introduce its digital audio ad-tech tools.
    2. Hire more experienced operating managers.
    3. Improve integration in the car.

Also, SiriusXM's strategic investment "obviously ends any takeout speculation" which creates limited upside in the near-term. Over the longer term, Pandora is on the right path and could even act as a distribution channel for Sirius' exclusive content to monetize non-paying users.

Check out Jason Helfstein's track record.

Bank Of America Reaffirms At Buy

Bank of America's Mark Kelley reaffirms a Buy rating and $12 price target on Pandora's stock following the SiriusXM announcement. Similar to Helfstein's thesis, the deal does end M&A speculation (for the time being) but this is could be seen as a positive.

Pandora now boasts a better balance sheet which it can use to invest in its on-demand platform, the analyst added. Also, the sale of Ticketfly was a necessary move and better positions Pandora to focus on its core product.

Related Links:

Keith Meister's Bullish Stance On Pandora 2.0

Statistics Show Music Streaming Is Now Too Big To Fail...For The Music Industry

 

Related Articles (SIRI + P)

View Comments and Join the Discussion!

Posted-In: Analyst Color Long Ideas M&A News Downgrades Reiteration Asset Sales Analyst Ratings Best of Benzinga

Latest Ratings

StockFirmActionPT
RIGRF LaffertyMaintains5.0
NOVRF LaffertyMaintains13.0
WSCDA DavidsonMaintains19.0
ITTDA DavidsonReiterates70.0
NOWGoldman SachsMaintains376.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com