$SIRI Multiple Firms Raises Price Targets
> $SIRI Goldman Initiates $3.50 Buy Target, Options? (Dec 18 2012)
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The first bit of news for Sirius XM (SIRI) as of close yesterday was an initiation by Goldman Sachs of coverage of the company, and an initial target of $3.50 per share .
From the report by StreetInsider :
"We believe Sirius XM offers investors a mix of robust growth along with accelerating profitability and free cash flow that exceeds peers," the analyst comments. "Despite its performance year to date (+59% vs. S&P 500 +13%), we see incremental upside to the stock via greater than expected growth in free cash flow (FCF) and FCF/share estimates. We expect SIRI to utilize FCF and an under-levered balance sheet (in accommodative fixed income markets) to aggressively repurchase shares, shrinking share count by 20% through 2015E and 45% over the next ten years."
While I agree with their assessment of Sirius XM, I actually disagree with their price target for 2013. I'm a bit more bullish, seeing closer to $4 and perhaps $4.25 in 1 year's time. My current near term target of $3.30 has merit and it is one which I believe may actually be hit this year. I believe Goldman is underestimating the combined impact of continued strong performance of the company as well as share buybacks which should be ongoing through 2013. In using a $3.50 target I believe Goldman is playing it safe, and giving themselves room to upgrade the target as share prices rise. There's certainly merit in being a bit conservative, though, and I feel this $3.50 price target will be well received by many investors. Still, watch for this target to be upgraded as 2013 unfolds.
You may be wondering why the title above ends with "Options?"
Consider a well written article by Seeking Alpha's Little Apple, discussing "triple witching" which is at play this week and will truncate with Friday's activity. Little Apple quotes :
It is the simultaneous expiration (or rollover) of various futures and options contracts. These contracts include some of the stock index futures, some of the stock index options, and the individual stock options. The simultaneous expiration of the three types of markets is the reason that the event is known as triple witching. However, with the addition of some single stock futures contracts, triple witching is sometimes referred to as quadruple witching.
Triple or quadruple witching can cause erratic behavior in the affected (and some non affected) markets, both during the week preceding, and on the expiration day. Some traders take no notice of this, some recommend caution, and others recommend not trading at all. Which reaction you choose will depend upon your trading style (scalping, day trading, etc.), your trading system, and primarily your level of trading experience (i.e. new traders will probably be more cautious than experienced traders).
Ghosts, goblins, witches? Is it better for investors to simply stay hands off through the week preceding that scary "witching" Friday? It appears in the case of Sirius XM that so far if you are long, the answer is yes. The equity appears to be holding the line and may even be due for another run up on the back of the Goldman announcement above.
READ MORE HERE http://seekingalpha.com/article/1070551-siriu...et-options
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> $ SIRI 3.30 Near Term Target Could Be Hit This Year (Dec 18 2012)
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Friday's activity in shares of Sirius XM (SIRI) in my opinion confirmed what should be the beginning of the next leg up on the steady rise in share price that has been seen for the second half of the year. Running from lows in the $1.80's in July up to after hours trading which hit $3.10 on December 14th, Sirius XM has seen appreciation of 72% in that time fram e.
The reasons are varied.
The company has performed extraordinarily well despite some of the most die hard critics and perma-bears going so far as to call Sirius XM investors "hopeless" and "stupid." Consistently beating guidance, paying down debt, and growing at a rapid pace in the face of the boogeyman that is internet radio, the company has proven itself even as its detractors booed and hissed from the sidelines.
Liberty Media (LMCA) has helped bring the share price of Sirius XM up in its pursuit of control of the company. Now sitting just shy of 50% ownership and awaiting FCC approval, Liberty's strategic purchases of Sirius XM from the hands of shorts have helped it maintain bullish bias, and served to catapult the stock not once, but twice. It appears now that this may be three times.
On top of this Sirius XM has issued both a dividend of $0.05 per share, which will pay out on December 28th, and an intent to repurchase up to $2 billion of stock in order to reduce the float. Not only should this increase buying pressure substantially going forward, but it helps show the new position that Sirius XM is in compared to a few years ago. Instead of crumbling under a mountain of debt and needing more, Sirius XM has shown itself to be a cash cow, raking in free cash flow and paying down old debt in short order. Dividends and buybacks are a way to return capital to Sirius XM shareholders, and over $2 billion will certainly be appreciated.
READ MORE HERE http://seekingalpha.com/article/1067751-siriu...&ifp=0
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> Sirius XM Issued a Buy Rating, $4 Target (oct 20 2012)
SIRIUS XM Radio Inc. (NASDAQ:SIRI) has been added to Bank of America Merrill Lynch’s U.S. 1 List based due to underlying growth in the OEM auto market as well as opportunities in the secondary auto market. Shares have a Buy rating and a $4 price target .
Source here
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> Barrington Boosts PPS from $3 to $3.75 Target on Sirius XM Radio $SIRI (Nov 5 2012)
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Sirius XM Radio (NASDAQ: SIRI) had its price target increased by Barrington Research from $3.00 to $3.75 in a research report released on Monday morning . Barrington Research currently has an outperform rating on the stock.
A number of other analysts have also recently weighed in on SIRI. Analysts at Wunderlich raised their price target on shares of Sirius XM Radio from $2.50 to $2.70 in a research note to investors on Tuesday, October 16th. They now have a hold rating on the stock. Separately, analysts at Morgan Stanley raised their price target on shares of Sirius XM Radio from $2.60 to $2.85 in a research note to investors on Monday, October 15th. They now have an equal weight rating on the stock. Finally, analysts at Zacks downgraded shares of Sirius XM Radio from an outperform rating to a neutral rating in a research note to investors on Friday, October 12th. They now have a $2.75 price target on the stock.
Shares of Sirius XM Radio traded down 2.59% during mid-day trading on Monday, hitting $2.825. Sirius XM Radio has a one year low of $1.61 and a one year high of $2.97. The company has a market cap of $14.668 billion and a P/E ratio of 5.62.
Sirius XM Radio last issued its quarterly earnings data on Thursday, November 1st. The company reported $0.01 earnings per share for the quarter, missing the analysts’ consensus estimate of $0.02 by $0.01 . The company had revenue of $867.00 million for the quarter, compared to the consensus estimate of $865.62 million. Sirius XM Radio’s revenue was up 13.6% compared to the same quarter last year . On average, analysts predict that Sirius XM Radio will post $0.54 earnings per share for the current fiscal year .
Sirius XM Radio Inc. broadcasts its music, sports, entertainment, comedy, talk, news, traffic and weather channels in the United States on a subscription fee basis through its two satellite radio systems.
http://www.jagsreport.com/2012/11/barrington-...adio-siri/
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> Morgan Stanley, Other Firms Raise Price Target with a Buy ratings raising their target prices to $4.00 & $5.50 per share (Oct 16, 2012)
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Sirius XM (NASDAQ:SIRI) received a vote of confidence Monday after analysts at Morgan Stanley raised their estimates and price target on the satcaster’s stock.
In their note to investors, the analysts at Morgan Stanley reiterated their Equal-Weight rating on Sirius and provided reasons why they believe the company has a solid fundamental outlook going forward. Sirius exceeded expectations for its fiscal third quarter and added more new subscribers than predicted, leading Morgan Stanley to increase its price target from $2.60 to $2.85 .
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Other investment firms have also made Sirius the subject of recent research reports, with conclusions on how to handle the stock varying. Analysts at Bank of America and TD Securities have each separately upgraded to Buy ratings on Sirius stock , raising their target prices to $4.00 per share and $5.50 per share, respectively. Zacks analysts, on the other hand, downgraded Sirius stock from Outperform to a Neutral rating on Friday, and adjusted their per-share price target down to $2.75.
October 16, 2012
Source: http://wallstcheatsheet.com/stocks/sirius-mor...rget.html/
> SiriusXM Hits 4-Yr High; Merrill, Citi See Big Buyback with a Buy rating and $3.75 price target (Oct 02 2012)
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Sirius XM: shares are trading higher Tuesday after the satellite radio company received the endorsement this morning from analysts at both Citigroup and Bank of America/Merrill Lynch.
Bank of America Merrill Lynch analyst Jessica Reif Cohen launched coverage of the company with a Buy rating and $3.75 price target . She writes that the company is “a business with scale enjoying accelerating growth due to a revived auto market.” While noting thqt there are near-term concerns around Liberty Media‘s intentions with regards to its nearly 50% stake in the company, she thinks there will be a focus on buybacks and an a tax-effective spinout of the Sirius stake to Liberty holders. The wild card, she notes, is whether CEO Mel Karmazin would stay on if the ownership structure changed. She concludes that the stock is “a compelling value.”
Citigroup analyst Jason Bazinet repeated his Buy rating on the stock, upping his target to $3 , from $2.50 . He also upped its rating on Liberty Media to Buy form Neutral, setting a price target of $121. Bazinet’s logic is similar. He notes that Liberty over the past few months has spent over $1.4 billion to boot its stake in Sirius to 49.6% from 40%. The analyst expects Liberty will cross the 50% level later this year. Once that happens, he sees three alternatives : The company launches a “reverse Morris Trust” transaction (basically spinning off the Sirius stake to holders) ; Sirius launch a repurchase program followed by a reverse Morris Trust deal in 2014 ; or a big stock repurchase but no reverse Morris Trust . His thinking is that Liberty will not immediately undertake a Morris Trust transaction. Ergo, he thinks Sirius will instead launch a $3 billion stock repurchase program.
Oct 02 2012 Source: http://www.forbes.com/sites/ericsavitz/2012/1...r=yahootix
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