Thursday, May 04, 2006

Morgan Stanley Sees Sirius As Long Term Growth Story

May 4, 2006

Satellite Standard Group likes to keep you informed about what is happening on the street. Analysts continue to maintain that Sirius Satellite radio is on the right path. Morgan Stanley analyst Benjamin Swinburne stated, "Sirius Satellite Radio's strong first-quarter results show that the company is scaling its business and that its programming lineup has helped drive growth."

  • Swinburne maintained his "overweight" rating and $8 price target.
  • Swinburne stated that he continues to believe Sirius is in the early stages of a long-term growth story.
  • Swinburne said first-quarter results at Sirius were ahead of his expectations. The simultaneous declines in subscriber addition costs and cost per gross addition by 41% and 45%, respectively, were the primary drivers behind Sirius' growth, he said, while gross customer additions rose 175% year-over-year.
  • Swinburne said Sirius' higher subscriber guidance of 6.2 million by the end of the year may be too conservative and that his own forecast of 6.3 million likely had upside.
  • Swinburne stated that satellite radio has penetrated to 5% of all registered vehicles and could rise to 20% by 2010.
  • Within that context, Swinburne said Sirius "can and will catch up to XM over time," though the two competitors are now on relatively equal playing fields on gross additions.

Satellite Standard Group readers can get more information in an article by Forbes by clicking HERE via Money Central.

You can learn more about Morgan Stanley by clicking HERE

5/04/2006 09:18:00 AM

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