Maxim Group Maintains a 'Buy' on Sirius XM Radio (SIRI); Strong 3Q11 Results with EBITDA Beat; Expect Expanding Operating Margins and 2012 Buyback

Maxim Group maintains a 'Buy' on Sirius XM Radio (NASDAQ: SIRI) price target of $2.50.

Maxim analyst says, "SIRI reported 3Q11 revenues of $765M (up 6% y/y), vs. our estimate of $776M and the consensus estimate of $764M...SIRI reaffirmed its commitment to begin buying back stock in 2012. We estimate that SIRI could buy back approximately $3.3B of stock over the next two years and maintain its debt/EBITDA target ratio of 3.0x at the end of 2013. SIRI reduced it debt/EBITDA from 5.2x 15 months ago to the current 3.3x...Shrinking the number of shares by 20% to 5.2B at prices between $2 and $2.40 a share during 2012/13 would cost about $3B and result in net debt of about $3.4B – about $1.3B higher than the current debt, but only approximately 2.8x 2013 EBITDA."

For more ratings news on Sirius XM Radio click here and for the rating history of Sirius XM Radio click here.

Shares of Sirius XM Radio closed at $1.73 yesterday.

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