By Brandon Matthews
Senior media and entertainment analyst of Standard & Poor’s U.S. Equity Research Services Tuna Amobi has raised his price target on Sirius XM Radio (SIRI) shares to $1.00 from his previous target of $.50, while cutting his projected 2009 loss estimates in half and projecting a full year profit for Sirius XM Radio in 2010. All of this while maintaining its HOLD rating.
“With recent signs of some auto OEM stabilization likely further outweighed by continued anemic retail trends, we see about 18.2M and 18.0M subscribers by ‘09 and ‘10 end, respectively (vs. ’08’s 19.0M), considering cash-for-clunkers and iPhone app. SIRI seems to have weathered near-term financing hurdles, though probably not fully dissipated. Factoring $750M of new senior notes (partly on refi), we narrowed ‘09 loss per share est by $0.08 to $0.08, see $0.01 EPS for ‘10 (vs. $0.06 loss), and we raise our EV/Sales target price by $0.50 to $1, noting $7B of net operating losses.”
Mr. Amobi was one of the first analysts to go out on a limb and forecast a price increase from .34 to .50, which SIRI shares were able to reach months prior to Mr. Amobi’s 12 month prediction. With the industry’s foremost media analyst now predicting a $1.00 share price, Sirius XM Radio investors can perhaps breathe a little easier.
Position: Long SIRI
Brandon – Did you just call Tuna Amobi the industry’s foremost media analyst??? Um, What????
Love ya man, but puhleasse. LOL
Tuna N. Amobi is the senior media and entertainment analyst in Standard & Poor’s U.S. Equity Research Services. In this capacity, he provides analysis and investment recommendations on a range of stocks in the broadcast, cable, satellite, movies and entertainment sectors, including Clear Channel, Comcast, DirecTV, Disney, News Corp., Time Warner and Viacom. He also writes periodic industry research reports. Tuna is a member of the Standard & Poor’s Analytical Policy Board, which reviews and directs major policy decisions and analytical criteria consistent with the mission of Standard & Poor’s Investment Services. As an accounting analyst, he is also a member of the Standard & Poor’s Core Earnings Committee, which creates and refines a proprietary analytical framework used to measure the performance of a company’s core business. Tuna makes regular appearances and has been interviewed and widely quoted in the financial and trade press, including Barron’s, BBC, Bloomberg, Business Week, CNBC, CNNfn, Dow Jones, Financial Times and Reuters. Prior to his current position, Tuna worked as an equity research coverage analyst at Lehman Brothers, New York, where he also used his expertise to proffer best investment ideas with the firm’s Investment Policy Committee. Earlier in his career, Tuna was a manager in the assurance and strategy consulting groups in the New York offices of Arthur Andersen & Co., and subsequently, KPMG Peat Marwick, LLP. Tuna holds the Chartered Financial Analyst (CFA) designation. He is a member of the American Institute of Certified Public Accountants, the New York State Society of CPAs, and the New York Society of Security Analysts. Tuna earned a JD (LL.B.) degree, and a B.Sc. (Accounting), summa cum laude, and received an MBA (Finance) from the premier University of Strathclyde, Glasgow, Scotland. He also holds the Series 7 and Series 63 securities licenses.
Brandon I am very happy that the target was raised by S&P. But for you to call Amobi the foremost media analyst when Jessica at Merrill has been doing this for 2 decades covering just about every radio TV and movie company in the business and hit just about every single media merger in the 90s before anybody else did, I mean come on now.
Have you ever followed the media analyst reports from the big firms in the last 2 decades, honestly? There have to have been thousands of them. Did you read even one?
Where did that statement come from? I will drop the issue but please man. Let’s think logically man.
@MUSCLE13
I like Jessica….problem is she is not covering SIRI any longer…nor is Mark Wienkes nor Tony Wible etc….the satellite radio industry is only covered by a select few analysts now…
Not for nothing, but isn’t it a moot point?
This news should be more widely distributed. Will this be forwarded to Seeking Alpha?
Hopefully, the big firms start to pick up coverage again as Sirius keeps hitting their EBITDA numbers.
I am hoping that the big media analysts start to cover it because for some odd reason Sat radio was covered by tech analysts in its early years of existence. Could be because the lack of cash flow. It’s about the purest form of media that exists, and unfortunately techies don’t know the first thing about media. But media analysts know EBITDA and you know Mel is going to push that like crazy now!
Come on man, do you really think this S&P guy has more credibility than your buddy Jim Cramer? [Only kidding!!!]
It’s nice to see someone real giving a well-thought out opinion. Much better than fools (Motley and otherwise!)
Thanks for posting this.
How can someone raise the 12 month target price by 100% and not upgrade from a hold.
demian and I were also discussing this…another issue is that he is projecting 18.2 million subs this year, and only 18 million next….leaves lots of room to upgrade later, don’t you think?
Just as a side not and I promise I will drop this Brandon. But for just about over a year after the proposed merger was first announced, Amobi stated in his multiple reports that he didn’t believe the Sirius and XM merger would ever get Government approval.
The 18M sub # for end of 2010 must be a typeo – 19M + sounds correct.
@J56D
I bet he waits for the 3rd Q #’s and raises it to a buy and 1.25 target and ups the subs.
Brandon – One company to watch that is covering Sirius is Gabelli. From what I remember about 8 or 9 years ago they were all over that Newscorp Chris Craft UPN TV station deal. It was a big multibillion dollar deal that most analysts were blindsided by as Viacom (Mel) was after Chris Craft big time. But Murdoch got em.
Mario Gabelli has been following media closely for several decades and knows it just about better than anyone. I don’t know who he has covering Sirius but I heard the guy on the earnings call. Gabelli Knows Media.