Wunderlich Securities Remains Cautious On Sirius XM Ahead Of Q3 Earnings

In a report published Monday, Wunderlich Securities analyst Matthew Harrigan reiterated a Hold rating and $3.50 price target on

. In the report, Wunderlich Securities noted, “We remain cautious on Hold-rated Sirius XM Radio (SIRI) moving into tomorrow's earnings, especially as float contraction benefits from repurchases have to be assessed against Liberty Media Corporation (LMCA-$46.46, Buy) emerging as an increasingly close proxy for Sirius XM after the Liberty Broadband separation. This implies that the developing supply vs. demand halo for Sirius XM stock may be overstated. We do not perceive any near-term imperative for Liberty to pay a premium to roll in the entirety of Sirius XM. The linchpin for 2020E EBITDA (and 2015 valuation) remains annual customer adds, inclusive of reactivated radios, and pricing. We have 2014E and 2015E EBITDA multiples inclusive of NOLs at a hefty 14.6x and 12.9x, with untaxed free cash yields estimated at 5.5% and 6.9%.” Sirius XM Holdings Inc. closed on Friday at $3.37.