FBR Capital analyst Barton Crockett noted the "encouraging" recent Wall Street Journal report regarding Pandora (P) making progress toward a near-term launch of an on-demand service comparable to Spotify and Apple Music (AAPL), adding that he believes the potential for a merger offers downside protection for the stock even if Pandora's foray into on-demand falters. SiriusXM (SIRI) has been public about its potential openness to acquiring Pandora and while disparity in valuations would make a Spotify-Pandora combination difficult to negotiate, Crockett sees the possibility for the two to "mimic Liberty" and merge while trading as separate tracking stocks. The analyst keeps an Outperform rating and $16 price target on Pandora shares.

Citi upgraded Sirius XM (SIRI) to Neutral from Sell with a price target of $3.30, down from $4.10. Over the last few months, the net asset value discount between Liberty SiriusXM (LSXMA) and Sirius XM has narrowed from 40% to 2%. To Citi's surprise, this occurred via a decline in Sirius XM's equity without appreciation in Liberty SiriusXM's value. The firm now finds the risk/reward in both securities as relatively balanced. As such, Citi upgraded Sirius XM from Sell to Neutral and downgraded Liberty SiriusXM from Buy to Neutral.

Pivotal Research upgraded Sirius XM (SIRI) to Buy from Hold with a price target of $4.90, down from $5.05. The magnitude of the decline in Sirius XM's valuation has been surprising, exacerbated by a current lack of institutional ownership and the fact most investors owned parent Liberty Sirius XM (LSXMK) to play the narrowing of the net asset value gap rather than as a way to invest in Sirius, the analyst tells investors in a research note. The firm says this has created an attractive investment opportunity, highlighted by the 55% upside to its new target price. It views Sirius as a free cash flow acceleration story.