Buckingham Sees Sirius XM Continuing To Report Above-Guidance Subs

Buckingham still sees Sirius XM Holdings Inc. SIRI to report above-guidance subscriber numbers following in-line May auto sales. May auto sales came in at 1.53 million, down 6 percent YoY on an actual basis (but up 2 percent on an adjusted basis). Following in line May auto sales, the brokerage maintained its full-year 17.6 million US auto sales estimate. As a result, the brokerage stuck to its current subscriber net add estimates of 40,000 paid-promo and 369,000 self-pay for the second quarter, and 160,000 and 1.6 million, respectively for 2016. Buckingham's total net add estimate of 1.73 million is above guidance of 1.6 million. Analyst James Ratcliffe said Liberty Sirius XM Group LSXMA is the best way to get exposure to SIRI upside, as "LSXMA currently trades at an 14% discount to NAV, which we believe to be excessively wide." Ratcliffe maintained his Buy rating on SIRI, with a target price of $5, implying a 24 percent upside. On Liberty Sirius XM, the analyst has a Buy rating and $46 target price. Shares of Sirius XM fell 0.12 percent to $4.01.
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