UPDATE: Wunderlich Securities Raises Target to $2.10 on Sirius XM Radio; Subs Upside Continues
Wunderlich Securities raises its price target from $2 to $2.10 on Hold-rated Sirius XM Radio (NASDAQ: SIRI) on continuing upside to subs.
Wunderlich Securities says, "Even with the revision in Sirius XM (SIRI) net 2012 subscriber guidance to 1.5mm from 1.3mm, possibly still conservative as the used car market develops, it seems that retention efforts across a now 22.3mm installed base viscerate plausible 2012 guidance upside on sales ($3.3bn), EBITDA ($875mm), and FCF ($700mm). Management did admit that subs on retention plans have increased without providing a precise delta, making us comfortable with only a $12.41 2013E estimated ARPU despite the nominal $14.49 January 2012 price. A gamechanger could be SIRI's more aggressive posture on new apps such as the arrangement with Google that allows it to increasingly enter Pandora's natural habitat. This complements higher functionality on Lynx 2.0 radios."
SIRI closed at $2.23 on Tuesday.
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