David Joyce, analyst for Miller Tabak issued a report today that begins to take into account some of the guidance issued by Sirius last week. Joyce sees Sirius and XM both as buys, but has lowered his short term price target on SIRI to $3.00 and long term estimate to $4.00. The analyst has a $14.00 price target on XMSR.
Joyce believes it would still be relatively cheaper to buy XMSR now rather than SIRI, based on their merger exchange ratio of 4.6 shares of SIRI to be issued for each XMSR share. In his opinion, based on the current SIRI price ($2.00), XMSR should be trading at $9.20, but it is currently at $7.79, an 18% parity valuation gap.
Tyler Savery Position - Long Sirius, Long XM