Barrington Research analyst James Goss this morning upped his rating on Sirius XM (SIRI) to Outperfrom from Market Perform, setting a price target of 70 cents, or twice yesterday’s closing price of 35 cents.
Goss writes that “after a recent period of significant volatility in the share price,” several factors are working in the satellite radio company’s favor. He says a favorable swing in EBITDA to more than $500 million into positive territory this year should be followed by substantial additional revenue gains.
The analyst contends that Sirius now has “fundamental momentum,” driven by a number of factors:
Cost cuts across a broad swatch of line items, with more to come.
Added charges for the previously complimentary Internet service.
Increased prices for added subscriptions under family plan.
Likely to add “royalty recovery” fee under new terms of FCC agreement.
New initiatives like iPhone App “are being very well received.”
SIRI today is up 2 cents, or 6%, to 37 cents.
(Source: Barron's)
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