by Christopher Freeburn | August 13, 2012 12:27 pm
Shares of Pandora (NYSE:P), the Internet radio service, slipped about 3% in Monday mid-day after the company was downgraded by a Wall Street analyst.
Scott Devitt at Morgan Stanley (NYSE:MS) reduced his rating for Pandora from “Overweight” to “Equal Weight,” citing the impact of rising costs on profits as the company expands its sales teams, Forbes noted.
Pandora is looking to increase its ad sales from local radio streams. Devitt acknowledges that the effort will produce increased revenue in the long-term, but says that the short-term costs of building the sales infrastructure will dent profits.
Devitt projects a loss before earnings, taxes and charges of about $11 million for Pandora in fiscal 2013, followed by a $9 million loss in fiscal 2014, which is considerably worse than other analysts’ estimates.
The company’s shares were trading under $10 after news of the downgrade broke. Devitt says his price target for Pandora is $12 a share.
Source URL: http://investorplace.com/2012/08/pandora-shares-fall-on-ratings-cut/
Short URL: http://invstplc.com/1nwogW9
Copyright ©2015 InvestorPlace Media, LLC. All rights reserved. 700 Indian Springs Drive, Lancaster, PA 17601.