can stern stop xm, 695k 4thq projected xmsr

Can Stern Stop XM's Leadership?
November 25 , 2005

Standard & Poor's Equity Research analyst Tuna Amobi reiterated a "buy" rating on XM Satellite Radio Holdings today (nasdaq: XMSR - news - people ) and raised the price target to $36 from $33.

In a research report, Amobi attributed the action to "robust holiday sales of retail subscriptions to XM's portables, led by Roady2 and SKYFi2." Problems at General Motors (nyse: GM - news - people ), a "key partner," won't derail XM's momentum at the automotive OEM channel, where GM and Honda Motor (nyse: HMC - news - people ) combined plan more than 2 million XM-factory installed vehicles in 2006. Amobi said a likely attainable 2005 target is 1.8 million..

"We assume the 2006 debut of jock Howard Stern on rival Sirius Satellite Radio (nasdaq: SIRI - news - people ) will boost overall awareness for satellite radio, without tilting XM's long-term leadership of the category," Amobi said. The analyst rates Sirius at "hold."

California-based research firm Bridge Ratings & Research has been trending Stern subscriptions all year. In their just-released trend update, Bridge Ratings President Dave Van Dyke shared this insight:

"By the end of January 2006, Bridge Ratings projects 1.4 million additional new subscribers to Sirius due to Stern's new channels. Sirius' 750,000 sign-up rate for Q4 2005 will surpass XM's quarterly number and for the first time will give Sirius the majority of the subscription activity for the quarter."

Bridge Ratings projects XM will add 695,000 new subscribers in the 4th Quarter