Investors who have had their eyes Sirius XM Radio Inc. (NASDAQ: SIRI) might think now is the time to buy, as numerous analysts are projecting a sharp climb in the media company’s stock this quarter. The recent news came today with a Sirius stock upgrade from Wunderlich with a price target of $1.50.
Sirius stock is currently trading at $1.05 a share. The Wunderlich target is the highest on Wall Street, with 7 experts projecting a mean price target of $1.26 for the penny stock. The high price target for SIRI stock was $1.40 previously, so the mean target is sure to change soon. The lowest estimate for Sirius stock is calling for shares to remain relatively stable, at a target of $1.00 per share.
For those unfamiliar with Sirius, the New York City based company broadcasts music, sports, news, talk, entertainment, traffic and weather channels in the United States, for a subscription fee. The radio company’s two subsidiaries, XM Satellite Radio Holdings Inc. and Satellite CD Radio Inc., operate 10 in-orbit satellites and over 800 terrestrial repeaters combined. Subscribers enjoy over 170 channels, spanning all interests and topics.
Sirius stock has done extremely well as of late and has seen a +76.7% hike in stock price since January. Likewise, the penny stock has improved by +96.3% since last August and has met or exceeded earnings estimates for four consecutive quarters. Those are all bullish signs. An average quarterly revenue estimate of $705 million (a sales growth of 12%) isn’t bad either. Add in hopes of a rebound in auto sales that will put Sirius radio receivers at the disposal of more drivers and you have the recipe for a good run.
However, it is worth noting that Wunderlich has been flip-flopping on Sirius stock throughout 2010. In January, the stock was originally listed as a “buy” before being downgrade to a “hold” in March. The investment firm has come back with a “buy” status in August, along with the highest analyst estimate. So perhaps it’s a bit too soon to trumpet the new $1.50 target as a reasonable expectation for shares.
It will be interesting to see if investors follow the opinion of Wunderlich and the rest of the analysts, or if they become wary of these experts’ back-and-forth projections.
If investors jump with Wunderlich’s advice, Sirius should be in for a very successful quarter, and shareholders would love to see the 50% stock hike being projected.
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