UPDATE: Goldman Sachs Downgraded Sirius Looking For Better Entry Point
In a report published Thursday, Goldman Sachs analyst Mathew Niknam downgraded Sirius XM Radio Inc. (NASDAQ: SIRI) from Buy to Neutral and removed the company from Americas Buy List.
Sirius has been successful, up 39 percent since being added to Americas Buy List on December 17, 2012. 3Q13 revenue was reported at $963M, +10.8 percent YoY but slightly shy of expectations. Sirius announced $0.50 per month increase on core services which the analyst expects to see a re-acceleration of ARPU growth. Niknam further anticipates high-single digit volume growth.
Despite Sirius' success, Goldman Sachs reported that they see less upside to the $4.25 PT. Niknam commented, “We believe the core elements of the Sirius XM story remain in place, including strong volume growth (SAAR strength, used car opportunity), margin expansion, and outsized FCF/share growth. However, we look for a better entry point, with the stock now trading at a sub-5% normalized FCF yield for 2014.”
Sirius closed at $3.91 and is currently trading with the opening bell at -2.56 percent.
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