Citi's Online Media Play: Pandora

In a stale after-hours session, one of the few notable sell-side notes that was passed around was a Pandora Media Inc P initiation by Citi. Focusing on the U.S. SMID online media names, Pandora was given a Buy rating and a $16 price target. As part of their investment thesis, Citi highlighted 3 areas that they thought would drive shares higher:

1. Offering of On-Demand incremental, $120 million in costs are already accounted for in current model.
2. Acceleration of active listener growth as Apple moves behind paywall.
3. Strong mobile positioning, highlighting people spending more time on Pandora radio than Facebook. Risks to Citi's Pandora call include uncertainty with new management, as well as on-demand model economics. Shares were up 2.21% after hours at $8.34/Share.