Wednesday, May 03, 2006

Laraine Mancini of Merrill Lynch On Sirius

May 3, 2006

Analyst Laraine Mancini of Merrill Lych has rasied some forecasts for Sirius for 2006. Mancini maintains a BUY on Sirius Satellite Radio with a $9.00 price target.

Satellite Standard brings you excerpts from the Mancini report:

"...We are increasing our FY06 ending subscriber estimate to 6.3mm from 6.1mm and are largely maintaining our SAC and churn forecasts at $110 and 1.8%. We now forecast FY06 revenue of $636mm and an EBITDA deficit of ($573mm) vs. over $600mm and ($565mm) guidance due to our higher subscriber expectation that places SIRI and XMSR at retail market parity for FY06...."

"...We expect a significant ramp in OEM subscriber growth as SIRI's partners increase penetration/rollout new models with SIRI as a factory option or standard feature. We project OEM gross adds of 1.4mm in FY06, 2.1mm in FY07 and 2.8mm in FY08. While we estimate 1-2mm gross retail adds per year, the volumes are difficult to predict so our retail forecasts are likely conservative. Ad revenue could exceed 10%..."

"We maintain our Buy rating and $9 price objective."

You can learn more about Merrill Lych here