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XM To Attract Subcribers With Lower Pricing
Maya Roney, 12.15.05, 12:42 PM ET
Bear Stearns research analyst Robert Peck said he expects XM Satellite Radio to continue to gain subscribers in the fourth quarter due to its upfront cost, which is lower than that of competitor Sirius.
"Contrary to some expectations that Howard Stern would completely skew market share in Sirius’ favor in the retail market this quarter, we find that XM is holding ground primarily due to the lower priced radios," wrote the analyst in a recent research note.
The research analyst maintained an "outperform" rating and $40 price target on the stock. XM’s (nasdaq: XMSR - news - people ) strategy this quarter is not spending on advertising, but focusing its marketing efforts on reducing the receiver price where the marketing dollar immediately translates into a subscriber.
"While a die-hard Howard Stern fan or a core football and basketball fan may take Sirius regardless of the receiver price and irrespective of how much advertising XM does, the undecided consumer could very well take XM because of the lower upfront cost," said Peck.
The analyst feels confident that both XM and Sirius (nasdaq: SIRI - news - people ) will be able to meet his expectations as they continue to add subscribers at a rapid pace throughout the fourth-quarter.
"Current valuation levels present an attractive entry point for the long-term investors," he said.
http://www.forbes.com/2005/12/15/XM-...rtner=yahootix
Maya Roney, 12.15.05, 12:42 PM ET
Bear Stearns research analyst Robert Peck said he expects XM Satellite Radio to continue to gain subscribers in the fourth quarter due to its upfront cost, which is lower than that of competitor Sirius.
"Contrary to some expectations that Howard Stern would completely skew market share in Sirius’ favor in the retail market this quarter, we find that XM is holding ground primarily due to the lower priced radios," wrote the analyst in a recent research note.
The research analyst maintained an "outperform" rating and $40 price target on the stock. XM’s (nasdaq: XMSR - news - people ) strategy this quarter is not spending on advertising, but focusing its marketing efforts on reducing the receiver price where the marketing dollar immediately translates into a subscriber.
"While a die-hard Howard Stern fan or a core football and basketball fan may take Sirius regardless of the receiver price and irrespective of how much advertising XM does, the undecided consumer could very well take XM because of the lower upfront cost," said Peck.
The analyst feels confident that both XM and Sirius (nasdaq: SIRI - news - people ) will be able to meet his expectations as they continue to add subscribers at a rapid pace throughout the fourth-quarter.
"Current valuation levels present an attractive entry point for the long-term investors," he said.
http://www.forbes.com/2005/12/15/XM-...rtner=yahootix