Merrill Lynch Weighs In On Ford Canada / Sirius Deal
July 13, 2006
Satellite Standard keeps you informed. Earlier today we suggested that investors keep their eyes open for analyst reports looking at the Ford Canada announcement. Well, Laraine Mancini of Merrill Lynch has just issued such a report.
Report Excerpts:
.........We interpret Ford of Canada’s announcement that it will install Sirius Canada radios as standard equipment by 2008 as a positive catalyst for the US satellite radio business. In our view, Ford of Canada’s move could spur GM, Chrysler and Ford in Detroit to accelerate factory installs of satellite receivers, which would benefit both SIRI and XM. In 2008, we estimate that Chrysler and Ford willfactory-install 2.2mm SIRI radios, 45% of total production. If we assume the two OEM’s match Ford of Canada’s 100% penetration, we calculate upside of
2.9 million receivers.......Also Discussed in the report was the length of promotional periods:
.......Mercury Mountaineer ran a promotion in May which included a 3-year bundled subscription to SIRI. In our view, the expansion of this program to additional vehicle lines could significantly benefit churn as we continue to believe that lengthened exposure builds greater product and brand affinity.........Merrill Lynch maintains a "BUY" rating on Sirius:
.........We are maintaining our Buy rating and $9 price objective on SIRI. In our view, investors must separate XM news flow from SIRI fundamentals, which should beeasier to do as SIRI continues to meet its milestones while XM works to eliminate overhangs from FCC/FTC investigations, shareholder lawsuits, and retail market deceleration...........SSG readers can obtain more information and/or inquire about the full report and disclosures by visiting Merrill Lynch
HERE7/13/2006 04:34:00 PM
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