Sirius XM Radio (SIRI) PT Raised to $7.25 at Deutsche Bank
Deutsche Bank raised its price target on Sirius XM Radio (NASDAQ: SIRI) to $7.25 (from $7.00) while maintaining a Buy rating.
Analyst Brian Kraft commented, "We're maintaining our Buy rating and raising our PT to $7.25 (from $7) due to a modest increase in our LT EBITDA and FCF forecasts. Despite the fact that we only expect 6.5% EBITDA growth in '18 (due to the CRB mandated step-up in music performance royalties this year), we still see attractive growth in FCF/share both on a fully-taxed and actual basis (at +16% and + 8%, respectively) given SIRI's continued capital return strategy and the implementation of the new tax law. While SIRI might have more modest upside (16% implied by our target) than some others in our coverage universe, we continue to like the durability and FCF generation of the business, the growth outlook, and strong management execution. SIRI trades at a 5.2% UFCF yield and 15x EV / Operating FCF on our '19 estimates (our $7.25 PT implies a 4.6% '19 UFCF yield), but we think these levels are justified given the growth outlook and levered equity return model, and it doesn't hurt that Liberty owns 71% the company."