According to a study released by J.D. Power and Associates, the retail vehicle sales in the U.S. for September 2011 look optimistic and are on track to reach the highest level since April 2011. [1] This is positive news for Sirius XM (NASDAQ:SIRI) which heavily depends upon its ability to get installed in more new and pre-owned vehicles through ties with automobile makers such as Ford (NYSE:F), GM (NYSE:GM) and Toyota (NYSE:TM). For the whole year the research firm expects 11% growth in vehicle sales which is a positive signal given the economic uncertainty. As a result, we maintain our subscriber growth expectations of over 15%. It seems that at this point there is no sufficient evidence to get alarmed about Sirius XM’s ability to gain subscribers as it tries to increase its penetration in sold vehicles.
Our price estimate for Sirius XM stands at $2.18, implying a premium of roughly 30% to the market price.
See our complete analysis for Sirius XM’s stock.
Notes:- September Auto Sales Upbeat: J.D. Power and Associates, Satellite Radio Playground, Sept 22 2011 [↩]
