Stifel Nicholas analyst Kit Spring weighed in today on the new guidance provided by Sirius XM CEO Mel Karmazin, at the Merrill Lynch Media Conference yesterday. As I mentioned in a recent article, the low-ball estimates given by Mel would result in analysts lowering their forecasts and readjusting their models.
Referring to the new guidance as "mixed" although a "net negative," Stifel Nicholas is maintaining its buy rating and has lowered its price target to 2.00 from 3.00, with the belief that 4.00+ is possible under the right circumstances.
Kit also seems to be as confused as the rest of regarding the low-ball estimates given for 2009, noting as we all did that the estimates given did not "jive" with the increased penetration rates that are being presented.
Warning of downside risks, Kit also hinted of the possibility that the company could be sold in lieu of not finding adequate financing of the 2009 converts.
Position: Long SIRI