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Macquarie analyst Amy Yong weighed in with a few insights on shares of Pandora Media Inc (NYSE:P), following recently announced partnership with Sirius XM and the sale of Ticketfly, which added significant capital resources to the streaming music giant.

Yong wrote, “Our model now accounts for the puts/takes of two liquidity boosts this month:

  1. Despite selling Ticketfly for ~US$200m, Pandora’s sale allows it to re-shift its focus back to the core business and still remain in ticketing […] Our model now reflects this transaction; still unknown are the economics of its commercial arrangement with Eventbrite.
  2. Sirius’ investment gives it three board seats and an inside look into P: Sirius XM will invest US$480m in Pandora by year-end; board seats could be filled by Sirius’ board members or someone new (including Liberty). We expect Liberty could follow a similar playbook with Pandora as it did with Sirius XM.”

The analyst concluded, “Near-term liquidity has been resolved with US$680m from Liberty and Ticketfly. Now comes execution: balancing growth with cost control and the ultimate pursuit of ad and/or sub.”

Yong reiterated a Neutral rating on Pandora shares, while lowering his price target to $9.00 (from $11.00), which represents a potential upside of 9% from where the stock is currently trading.

According to TipRanks.com, analyst Amy Yong has a yearly average return of 8.8% and a 62% success rate. Yong has a 12.8% average loss when recommending P, and is ranked #708 out of 4596 analysts.

Out of the 19 analysts polled by TipRanks (in the past 3 months), 10 rate Pandora stock a Buy, while 9 rate the stock a Hold. With a return potential of 48.5%, the stock’s consensus target price stands at $12.37.


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