12-19-01, 05:01 AM
Wall Street analysts covering satellite radio said they like what they see so far from the developing business.
Lehman Brothers analyst William Kidd said demand for XM Satellite Radio's product is better than expected, and that visibility of the digital radio service is on the rise.
Kidd and Lehman Brothers also conducted a survey of 100 retailers, and found that fourth quarter demand for XM will at least come in at the mid-to-high range of the firm's consensus of 20,000 to 30,000 subscribers. "We believe early results should still positively surprise many," Kidd said.
Positive demand so far is a good near-term indicator for both DARS companies, which in addition to XM includes Sirius Satellite Radio. "Given our expectations coupled with present market skepticism, we believe there is still good potential for the sector to trade even higher as early XM and Sirius results unfold," he said.
A favorite among satellite stocks - at least for the moment - is Sirius. "We believe the market is overly discounting Sirius’ probability of launching service in first quarter 2002, while conveniently forgetting that XM’s time-to-market advantage is borderline immaterial on a forward-looking basis," Kidd said.
Last week, Rob Kaimowitz of SG Cowen initiated coverage of XM with a "Strong Buy" rating and a 12-month $20 price target. "We believe that satellite radio will be to free radio what Cable was to free over-the-air TV," he said in a research note.
"There are many skeptics and those that claim they would never pay for radio," Kaimowitz said. "We would argue that it is number of people who would pay for the service (rather than those who would not) which is the critical number. The overwhelming evidence that we have seen suggests that substantial market penetration should be achieved."
From <a href="http://www.skyreport.com" target=none>SkyReport</a> (Used with permission)
Lehman Brothers analyst William Kidd said demand for XM Satellite Radio's product is better than expected, and that visibility of the digital radio service is on the rise.
Kidd and Lehman Brothers also conducted a survey of 100 retailers, and found that fourth quarter demand for XM will at least come in at the mid-to-high range of the firm's consensus of 20,000 to 30,000 subscribers. "We believe early results should still positively surprise many," Kidd said.
Positive demand so far is a good near-term indicator for both DARS companies, which in addition to XM includes Sirius Satellite Radio. "Given our expectations coupled with present market skepticism, we believe there is still good potential for the sector to trade even higher as early XM and Sirius results unfold," he said.
A favorite among satellite stocks - at least for the moment - is Sirius. "We believe the market is overly discounting Sirius’ probability of launching service in first quarter 2002, while conveniently forgetting that XM’s time-to-market advantage is borderline immaterial on a forward-looking basis," Kidd said.
Last week, Rob Kaimowitz of SG Cowen initiated coverage of XM with a "Strong Buy" rating and a 12-month $20 price target. "We believe that satellite radio will be to free radio what Cable was to free over-the-air TV," he said in a research note.
"There are many skeptics and those that claim they would never pay for radio," Kaimowitz said. "We would argue that it is number of people who would pay for the service (rather than those who would not) which is the critical number. The overwhelming evidence that we have seen suggests that substantial market penetration should be achieved."
From <a href="http://www.skyreport.com" target=none>SkyReport</a> (Used with permission)