Lazard reiterated the BUY rating and $1.35 target on the stock, but also followed SIRIUS XM’s lead with higher subscriber counts. The new subscriber counts are put at about 1.383 million and ending the quarter with more than 20.15 million subscribers. One other issue helping out: higher car sales. There is some caution here though and that is in the form of higher subscriber acquisition costs.
The cautionary view came from Rob Cox of BreakingViews on CNBC today. The primary concern revolved more around the free Pandora internet radio that smartphones can now stream as free competition. Cox did note that SIRIUS XM does have it mojo back and the stock is now nearly worth $5 billion. Cox noted that Slacker and Pandora are both making inroads and a new synch technology could pose a threat down the road and they play more than just music.
The Lazard call is helping, but at $1.30, that only leaves another $0.05 until the price target objective is met. Even other price target objectives of $1.50 are now getting closer and closer. At some point valuation has to come into play because buying SIRIUS for a $0.05 gain to $0.20 gain is now an inverted risk-reward matrix for investors… unless price targets get boosted further.
SIRIUS XM is hitting yet another 52-week high today as shares hit $1.30. At 1:30 PM EST we have also seen more than 63 million shares trade hands versus an average volume of about 71 million shares.
JON C. OGG
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