RBC: Sirius Valuation Difficult to Justify (SIRI, CMLS, ETM, SGA, EMMS)
Trader favorite Sirius XM Radio (SIRI) slipped by -1% on Thursday after RBC Capital Markets said that the stock’s valuation is difficult to justify. The analyst noted that the firm’s third-quarter net subscriber adds were better than expected, and it is pleased to see the company start to address longer-term liquidity issues, but a 17x 2011 enterprise value to EBITDA multiple is too rich to be bullish on the stock.
Elsewhere in the analyst space, BGB Securities took Sirius to Hold from Buy with a $1.50 price target, citing earnings and valuation. The target represents a 7% premium to Wednesday’s closing value.
Over the last month, Sirius has gained 32%, trailing only Cumulus Media (CMLS) in the radio sector. Meanwhile, Entercom Communications (ETM) and Saga Communications (SGA) are ahead by 19% and 6% respectively for the period, as Emmis Communications (EMMS) hangs in the red by -30% after letting a buyout offer expire.
Investors can track the Radio Stocks Index for performance trends and a suite of other metrics at tickerspy.com.
More on this topic (What's this?)
Bullish Bets Grow on Sirius XM (SIRI) (Benzinga, 10/13/10)
SIRIUS XM Adds Over 334,000 Net Subscribers in Q3 (Benzinga, 10/13/10)
Sirius XM Radio (NASDAQ: SIRI): Third Quarter Earnings Preview 2010 (Stock Wizard, 11/1/10)
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