On Thursday, shares of internet radio provider Pandora Media Inc. are spiking, up around 2.5% in midday trading after analysts at Axiom upgraded its stock to “Buy” from “Hold.” The firm also put a $16 price target on the stock, which is about $4 above its current trading price, CNBC reports.

"We now believe that there is a greater probability of Pandora building a successful and differentiated on-demand service while increasing the value of the core," said Axiom analysts in a note. "Users' appetite for paying for music streaming is increasing and Pandora is poised to capture share cost effectively."

Axiom, an internet media equity research firm, said that they had been neutral on Pandora stock for years, even “skeptical” on the company’s ability to strive in an increasingly competitive environment. But with Pandora’s profitable core business, appeal as an acquisition target, and more and more users warming up to the streaming platform, the Axiom analysts have changed course.

All of these things are “important because this likely means that the on-going negotiations with the major labels for an on-demand service have a good chance of success," the firm added.

Pandora has seen its stock decline almost 9% so far in 2016, and over 28% year-over-year.

Pandora currently sits at a #3 (Hold) on the Zacks Rank.

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