Shares in Pandora Media Inc (NYSE:P) look poised to go on another extended run after Piper Jaffray upgraded P stock to the equivalent of buy and assigned one of Wall Street’s higher price targets on shares.
After a series of punishing downgrades in early spring, a number of analysts have since upgraded their opinions of P’s prospects, which has fueled steady upside in Pandora stock. Now that Piper Jaffray has weighed in with a more optimistic view, the herd mentality should help P stock extend these hard-won gains.
And there is a good case to be made for Pandora stock.
P Stock Just Getting Started
Analyst Stan Meyers told clients that the company is “approaching an inflection point” thanks to a number of developments.
The company is about to release a new on-demand platform with the potential to add more than 9 million additional subscribers. At the same time, the broader outlook is much improved. Meyers is optimistic about the way negotiations with major music labels are progressing and points to margin expansion across the industry.
As such, Piper Jaffray lifted its rating to “Overweight” from “Neutral.” (That’s essentially the same thing as an upgrade to buy from hold.) Furthermore, the analyst lifted his price target to $18 from $12. That gives P stock implied upside of nearly 40% in the next 12 months or so.
Analysts’ average target price stands at just $14.41, good for implied upside of 10%. Just make sure to note the range of targets on the stock right now. That is, Wall Street has PTs of anywhere between $10 to $22, so analysts are far from a clustered consensus.
Still, even if Piper Jaffray’s 40% upside price target proves to be over-exuberant, the momentum behind P stock can’t be denied. The technicals are strengthening, as P stock has a golden cross in its sights. And this latest upgrade underscores just how much sentiment has turned in the name’s favor.
As of this writing, Dan Burrows did not hold a position in any of the aforementioned securities.
