Friday, June 02, 2006

Are you all sitting? Jacoby is turning positive on Sirius!

June 2, 2006

First Cramer(here), and now Jacoby...?

Market Scan Forbes
Sirius' ZING Portable Player A 'Zinger'?
Mary Crane, 06.02.06, 2:52 PM ET

Banc of America analyst Jonathan A. Jacoby said the new live portable media device from Sirius Satellite Radio, expected this summer, is a positive for the stock.

Using technology created by ZING, a consumer technology company, Sirius' new media player will stream live digital programming over the mobile device.
From what is known about the new platform, Jacoby said the device's storage capacity will likely be comparable to Sirius competitor XM Satellite Radio's "Inno" and "Helix" portable units, but the battery life and true satellite coverage will probably be worse. Where satellite coverage is weak, however, Sirius programming can be streamed over Wi-Fi on the device, which Jacoby said was an interesting "fix."

According to the analyst, the device's launch later this summer will face a more competitive market than previously thought, especially given XM's delays in getting the "Inno" and "Helix" onto store shelves. And the stakes are high: The portable satellite radio market could account for up to 15% of all new retail satellite radio subscribers this year.

So will ZING's device be a "zinger" for Sirius stock? Possibly, said Jacoby. But Sirius's expensive relative valuation -- Sirius trades at a 37% premium to XM on an enterprise value despite 2.4 million fewer subscriptions -- and a weak second quarter could hold the stock back.
"While we are becoming more positive on the Sirius story, we would look for a better entry point," Jacoby wrote in a note to investors Friday. Jacoby maintained a "neutral" rating and $5 price target on company stock. His top pick in the radio and television broadcasting industry remained Univision Communications, rated "buy" with a $40 price target.

Link to article: here

6/02/2006 03:48:00 PM

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