Barrington Research Lifts Target on Sirius XM Radio (SIRI); Fundamentals Strong as Karmazin Era Comes to a Close
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Price: $3.02 -4.43%
Rating Summary:
12 Buy, 10 Hold, 6 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 11 | Down: 12 | New: 13
Rating Summary:
12 Buy, 10 Hold, 6 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 11 | Down: 12 | New: 13
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Barrington Research boosted its price target on Outperform-rated Sirius XM Radio (NASDAQ: SIRI) from $3.00 to $3.75 noting fundamental gains continue as the Mel Karmazin era nears an end.
The firm notes Sirius XM posted record high levels in key metrics. "Subscribers approached 23.4 million; EBITDA hit $245 million for the quarter and $672 million for the first nine months while Free Cash Flow reached $195 million for the quarter and $440 million for the first nine months. The year-to-date FCF figure is greater than for any previous full year and the EBITDA figure is only moderately below the
$727 million recorded for all of 2011," the note. Managements guidance for 2012 EBITDA topping $900 million and FCF reaching $700 million are achievable, if not slightly conservative, they said.
They continued, "Momentum continues to be established in earnings, EBITDA and FCF growth, plus the company’s financial position continues to improve as the debt/EBITDA ratio moves below the 3:1x target and on a cash adjusted basis to around 2.1x. Revenues should move higher based on sub growth and higher ARPU, and profitability measures should improve as costs are kept in check. Improved free cash flow will enable the share buybacks management indicated it prefers in terms of returning capital to shareholders. Serious consideration of a buyback is potentially more imminent as the ownership struggle comes to a conclusion. We would also not rule out consideration of a cash dividend, although this is likely a lower priority."
For an analyst ratings summary and ratings history on Sirius XM Radio click here. For more ratings news on Sirius XM Radio click here.
Shares of Sirius XM Radio closed at $2.90 yesterday.
The firm notes Sirius XM posted record high levels in key metrics. "Subscribers approached 23.4 million; EBITDA hit $245 million for the quarter and $672 million for the first nine months while Free Cash Flow reached $195 million for the quarter and $440 million for the first nine months. The year-to-date FCF figure is greater than for any previous full year and the EBITDA figure is only moderately below the
$727 million recorded for all of 2011," the note. Managements guidance for 2012 EBITDA topping $900 million and FCF reaching $700 million are achievable, if not slightly conservative, they said.
They continued, "Momentum continues to be established in earnings, EBITDA and FCF growth, plus the company’s financial position continues to improve as the debt/EBITDA ratio moves below the 3:1x target and on a cash adjusted basis to around 2.1x. Revenues should move higher based on sub growth and higher ARPU, and profitability measures should improve as costs are kept in check. Improved free cash flow will enable the share buybacks management indicated it prefers in terms of returning capital to shareholders. Serious consideration of a buyback is potentially more imminent as the ownership struggle comes to a conclusion. We would also not rule out consideration of a cash dividend, although this is likely a lower priority."
For an analyst ratings summary and ratings history on Sirius XM Radio click here. For more ratings news on Sirius XM Radio click here.
Shares of Sirius XM Radio closed at $2.90 yesterday.
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