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Pandora shares rise on reports of new low-cost music streaming service

A banner for Pandora Media, the online-radio company, hangs in front of the New York Stock Exchange.
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A banner for Pandora Media, the online-radio company, hangs in front of the New York Stock Exchange.

Shares of Pandora rose nearly 5 percent Monday after a report said it will launch a new version of its music streaming service in the coming weeks.

The company will introduce a fresh version of its streaming platform and could charge as little as $5 month, according to a report from The New York Times.

The standard pricing model for streaming services stand at about $10 a month. Both Apple and Spotify offer single-person subscriptions at $10 a month with discounts available. Pandora's new streaming service could potentially entice users away from those players.

SunTrust Robinson Humphrey issued a report Monday upgrading Pandora's stock to "buy" from "netural" ahead of what it called "potential catalysts."

"The impending signing of direct deals with music labels; the announcement of new tiered products; and the ability to beat low guidance set by the company," SunTrust's Robert Peck, who gave Pandora a price target of $18, said in the report.

The Times also noted that online media giant Amazon will launch its own music streaming service, charging $10 a month or roughly half that amount for users of its Echo speaker system.

With Monday's gains, Pandora's stock is up more than 6 percent this year. It closed at $14.29 on Monday.

Pandora declined to comment.

Pandora 2016 Chart