Pandora could fetch as much as $21 a share in merger with Sirius XM, Oppenheimer says

A banner for Pandora Media, the online-radio company, hangs in front of the New York Stock Exchange.
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Jason Helfstein of Oppenheimer upgraded Pandora to outperform from perform, predicting a rally of as much as 57 percent on a potential merger with Sirius XM Holdings.

"We believe there are significant demographic/operating synergies between P/SIRI, and view a takeout as a legitimate possibility following press reports (12/2, CNBC) indicating SIRI has renewed interest, and subsequent 16 percent rally," Helfstein wrote in a research note Tuesday. "Establishing an $18 target, the low end of our $18-$21 takeout value."

On Friday, CNBC's David Faber reported Pandora is open to a sale, and Sirius XM Holdings is likely to pursue the merger, according to people familiar with the matter. Pandora declined to comment, citing a policy against commenting on speculation.

Since reaching a 52-week low of $10.15 on Nov. 10, shares of Pandora have surged nearly 32 percent as investors consider a potential transaction.