- Pandora Media (NYSE:P) has rebounded and then some from a postmarket decline yesterday, up 3.8% now as analysts and others took a deeper look at underlying strengths
- Shares had slipped up to 9% after hours yesterday as the company posted a miss on revenues and saw active listeners fall 1.6%.
- Today Morgan Stanley reiterated its Overweight rating and $15 price target (implying 21% upside), as analyst Benjamin Swinburne focused more on listener hours (which grew 7% to 5.66B) than the decline in listeners -- two changes that brought the company to a record 24 hours per listener per month.
- "We believe the majority of this engagement growth is coming from product improvements," Swinburne writes, "including the success of Thumbprint radio, its new ad serving technology Chronos, and growing distribution in cars and key in-home consumer electronics.”
- Axiom and Albert Fried also each reiterated Buy ratings, each with a $16 price target. On the other hand, Pacific Crest downgraded to Underweight and set a 12-month fair value of $6: "Pandora's core operating leverage has deteriorated, and we see little prospect for meaningful profits in on-demand," says the firm's Andy Hargreaves. "While M&A is possible, we do not view it as likely at the current valuation. We do not recommend owning Pandora."
- Previously: WSJ: Liberty floated $15/share offer for Pandora to combine with Sirius XM (Jul. 21 2016)