Pandora downgraded to market perform amid rising competition, uncertainty
Internet radio company Pandora was downgraded to market perform from outperform by analysts at Raymond James on Monday. Analyst Justin Patterson said he was concerned about the uncertainties surrounding co-founder Tim Westergren taking the helm as chief executive in an environment of increasing competition. Westergren is likely the right person to successfully lead Pandora, but it cold take time for his impact to show, Patterson wrote in a note to clients. "With Pandora's CMO also departing in the last month, we remain cautious on Pandora's ability to grow users," he wrote. The bulk of competition comes in the advertising space as Spotify ramps its ads focus to take advantage of its "strong daily engagement." Patterson said he believes at Monday's closing price of $8.80, Pandora shares are fairly valued. "We believe the changing landscape, multiple unknowns and lack of a catalyst warrant stepping to the sidelines," Patterson wrote. Shares of Pandora have dropped 34% so far this year, while the S&P 500 index is up 2.5%.
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