UPDATE: FBR Downgrades Pandora

Shares of Pandora Media Inc (NYSE: P) are trending lower following negative coverage from FBR analysts. Tuesday morning, Barton Crockett downgraded shares of Pandora from Market Perform to Underperform and lowered the price target from $28 to $11.

Crockett finds potential risk in the “debilitating cost structures” emerging from Copyright Royalty Board setting 2016–2020 royalty rates.

In addition, Crockett views Apple iTunes radio as meaningful precedent. Apple has minimum guarantee of 45 percent of revenue. Crockett feels 45 percent minimum would be an issue for Pandora in the long-term.

Shares of Pandora Media recently traded at $18.56, down 6 percent.