Advanced Television

SiriusXM gets major bank upgrade

July 23, 2020

North American pay-radio operator SiriusXM has done well for its shareholders, including Liberty Media (73 per cent shareholding).

The past week has seen BMW confirm that it will install SiriusXM’s 360L on-demand satellite + streaming audio player in all its 2021 vehicle range (except for some of the Series 1 models and X1 and X2 versions).  The new models start rolling down the production line in late July. The cars will include 12 months of SiriusXM’s All-Access service which extends to mobile devices and for in-home listening.

On July 22nd Volkswagen confirmed a similar scheme which will see 360L on the majority of its 2021 models but with only a free 3-month subscription.

The 360L system is all-embracing and will allow personalisation of stations and content and incorporate access to Pandora’s ad-free services.

The week has also seen Major League Baseball commentary on SiriusXM starting today July 23rd.

July 15th saw SiriusXM confirm it had 34.8 million subscribers.

A report from Deutsche Bank says that there’s more upside yet for the broadcaster. Five years ago its share price was about $3.83.  It has risen to $7.13 (in June 2018) but has fluctuated over the past year from $5.31 (June 2018) to $7.24 (Feb 2020).

Liberty Media loaned SiriusXM $530 million back in Feb 2009 when the broadcaster was somewhat struggling to pay its debt obligations and considering Chapter 11 bankruptcy. Liberty ended up receiving 40 per cent of common stock in return.

Deutsche Bank recommended clients with a ‘BUY’ rating on SiriusXM, and says it is updating its forecasts and models, noting that auto sales, churn, and conversion have been better than previously expected. Chiefly, the bank’s reports says it is improving its outlook on self-pay net additions for the broadcaster for the year, while it expects greater changes to EBITDA coming over the next two years.

Deutsche Bank has issued a new Price Target for SiriusXM’s shares, or $7.50 which implies a 27 per cent upside.

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