Wednesday, June 07, 2006

Forbes' on Morgan Stanley Comments

June 7, 2006

Satellite Standard Group likes to keep you updated on any information that may move stock prices. Here, Forbes posted an article mid day yesterday with the less positive interpretation of a what looked like a Morgan Stanley pre-market upgrade of XMSR. The devil is in the details!

Here was the pre-market headline release on jag notes:

06/06/2006 : JAGNote by Morgan Stanley(JAGNotes.com 06/06 07:52:10)
Source: JAGfn.com
XMSR: Reiterate Overweight - The firm has a price target of $31 citing
increased EPS estimates.

Here is the pre-market release on flyonthewall.com

XM Satellite Radio-XMSR at current prices, stock is attractive-reit OW@MSCO -(theflyonthewall.com 06/06 07:06:03)The firm is of the belief May and June's retail sales figures will improveand in the L-T, XMSR will be able to achieve a positive free cash flow.Congress's new legislation, which would change programming costs the companypays to record labels is the largest risk they face over the upcoming year.The firm increased their 2006/08 EPS estimates. Target price $31.S.FO RECO.FLY MSCO.FLY XMSR

Here is the Forbes Market Scan mid-day release:

Weak Retail Sales Hurt XM And Sirius
Mary Crane, 06.06.06, 12:31 PM ET

Morgan Stanley analyst Benjamin Swinburne lowered his subscription estimates for both XM and Sirius satellite radio operators because of weaker-than-expected retail sales in the second quarter.

But Swinburne, who said April sales are typically weak, forecasted an upswing in retail sales in May and June and remained bullish on both stocks in the longer term.
He maintained an "overweight" rating for both XM and Sirius, with price targets of $31 and $8, respectively, and added that, longer term, both companies could break even or reach positive free cash flow levels in 2008. Until retail sales improve, however, Swinburne reduced his second-quarter subscriber net additions and 2006 subscription levels for both companies.

For XM Satellite Radio, Swinburne said he expects only 450,000 net additions in the second quarter, versus 600,000, and 8.6 million subscriptions in 2006, down from 9 million.
Likewise, the analyst forecasted 530,000 net second-quarter subscriber additions for Sirius, versus 608,000, and 6.27 million subscribers in 2006, down from 6.35 million.
Swinburne said that at XM, which hasn't seen its market share improve in retail for the last two months, could see sequential improvement with its greater spending on marketing.
Sirius remained the analyst's top pick in the cable and satellite industry despite its weak second-quarter retail sales numbers. He said the company should maintain its majority market share in retail.

The risk to both XM and Sirius, Swinburne warned, included further retail deterioration and negative news flow related to legislation on digital music payments and license negotiations.
Other than XM and Sirius, Swinburne also rated DirecTV as "overweight" in the overall cable and satellite industry.

Link to story here

6/07/2006 07:41:00 AM

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