Albert Fried Raises Price Target for Pandora Media Inc Amid Merlin Royalty Deal

In a research report issued today, Albert Fried analyst Richard Tullo reiterated an Overweight rating on shares of Pandora Media Inc (NYSE:P), while raising the price target to $24 (from $19), after the Copyright Royalty Board (CRB) has affirmed the use of the company’s deal with Merlin as a valid benchmark for broader recording royalty rates.

Tullo commented: “The Merlin deal is important in three ways 1 ) The headline rate is lower than the CRB rate, 2) Pandora provides Merlin promotional benefits under its agreement. And 3) The CRB just admitted the Merlin rate as evidence of a market deal for IP Music Royalties. We think the admission is good news for Pandora but we think the eventual rate will be decided on in early to mid December 2015.”

Furthermore, “We define a best case scenario as a CBR OMR rate that is 16 micro pennies or lower, we define a worse Case Scenario as a CRB OMR rate at 25 micro pennies ore greater. Our analyst case scenario has a 30% probability and we think a range of 21 micro pennies represents a realistic rate which to base our projections.”

According to, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Richard Tullo has a total average return of 6.2% and a 59.8% success rate. Tullo has a 23.0% average return when recommending P, and is ranked #651 out of 3765 analysts.

Out of the 31 analysts polled by TipRanks, 21 rate Pandora Media Inc stock a Buy, 9 rate the stock a Hold and 1 recommends Sell. With a return potential of 9%, the stock’s consensus target price stands at $22.78.

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