Research firm Raymond James upgraded Internet music streaming company Pandora (P) two notches today to a Strong Buy from a Hold rating. The firm placed an $8 price target on the stock, well below the current price of Pandora stock of around $5.50 per share. 

According to Raymond James, the company's acquisition of digital audio ad company AdsWizz will double Pandora's total available market, The Fly reported..  Estimating that AdWizz "could be worth $4 per share" to Pandora, Raymond James added that with the deal, Pandora seems to be following a similar strategy to the one that Google (GOOG) successfully pursued with DoubleClick. 

In recent weeks, other analysts have been much less bullish on Pandora. For example, on February 23, Cowen reiterated a Market Perform rating on the shares and cut their price target on the name to $4 from $6. Similarly, on February 22, Credit Suisse reiterated a Neutral rating and lowered its price target on Pandora stock to $5 from $6. 

I believe that Pandora stock has many positive catalysts. Among these are its large audience,and valuable data, along with the synergies and significant  improvements that Sirius XM Holdings (SIRI) brings to the company. Sirius has a roughly 19% stake in Pandora. Moreover, Pandora stock, trading at a price to sales ratio of less than 1, has a very attractive valuation at current levels, and, as others have noted, it could become an acquisition target for a company eager to obtain the massive consumer data that it holds. It could also become a takeover target for a private equity consortium.