Why Pandora Media, Inc. Popped Today

While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of Pandora Media, Inc. (NYSE: P  ) gained 3% today after SunTrust Robinson initiated coverage on the Internet radio technologist with a buy rating.

So what: Along with the bullish call, analyst Robert Peck planted a price target of $34 on the stock, representing about 34% worth of upside to Friday's close. So while momentum traders might be turned off by Pandora's sharp pullback in recent weeks, Peck's call could reflect a growing sense on Wall Street that its monetization prospects are becoming too cheap to pass up.

Now what: According to SunTrust, Pandora's risk/reward trade-off is rather attractive at this point. "We expect Pandora to remain the clear leader in Internet radio and initiate with a Buy rating based on: 1) $2B+ revenue potential driven by monetization, not predicated on user growth; 2) opportunity presented by the recent pullback in the shares; and 3) longer-term optionality given platform scale," said Peck. When you add Pandora's debtless balance sheet to that juicy list of positives, it's tough to disagree with SunTrust's bullishness.

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