Pandora stock upgraded to overweight ahead of on-demand service launch
Shares of Pandora Media Inc. surged 3% in premarket trade Wednesday after the stock was upgraded to overweight from neutral and its 12-month price target raised to $18 from $12 at PiperJaffray. The upgrade reflects optimism regarding the potential outcome of music label negotiations, improving margins across the radio business and the upcoming release of a new on-demand platform that could add an incremental 9.2 million subscribers or roughly $750 million in revenue over the next three years, according to PiperJaffray analyst Stan Meyers. "Pandora is approaching the inflection point," he said. "We see meaningful upside ahead." The average rating on the stock is the equivalent to buy, while the median price target among a poll of nearly 30 analysts surveyed by FactSet is $14.17. Shares of Pandora were on track to open around $13.44 on Wednesday.
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