On the Heels of Earnings Call, S&P Analyst Reiterates Sirius Buy Rating

| About: Sirius XM (SIRI)
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Standard & Poor

By Demian Russian

On the heels of Sirius XM Radio’s (NASDAQ: SIRI) Q3 earnings conference call earlier this morning (see earnings call transcript here; earnings report here), Standard & Poor’s Media and Entertainment Analyst, Tuna Amobi, reiterated his BUY rating on the Satellite Radio provider and raised his price target from $1.50 to $2.00. Citing Sirius XM’s third quarter reported earnings per share of $0.01, compared to a $0.04 loss in Q3 of 2009, he noted that it beat his break-even estimate.

Noting Sirius XM’s pre-announced Q3 subscriber metrics, including 334,727 net subscriber additions, Amobi said, “As expected, net adds showed continued rebound in U.S. auto sales.” Amobi pointed to “healthy ARPU (Average Revenue Per User) gains,” but also mentioned the continuing “elevated” losses in the retail channel.

While he did note “continued uncertainties” regarding Howard Stern’s tenure at Sirius XM, it didn’t overshadow the “continued operating strides” he saw the company making, including reaffirming full-year 2010 guidance for $150 million in FCF (Free Cash Flow) and raising full-year 2010 adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) guidance from $575 million to $600 million.

Disclosure: Long SIRI