Sirius Shares Seen Offering More Upside Than XM Ed Lin, 11.02.05, 3:09 PM ET
Sirius Satellite Radio
Morgan Stanley analyst Benjamin Swinburne initiated coverage of Sirius Satellite Radio (nasdaq: SIRI - news - people ) at "overweight" and initiated coverage of XM Satellite Radio Holdings (nasdaq: XMSR - news - people ) at "equal-weight."
Swinburne has a $9 year-end price target on Sirius and a $34 year-end price target on XM.
"We are positive on the satellite radio stocks and believe both will perform well, but that Sirius offers more upside potential," he wrote in a research report. "We believe XM has proven the satellite radio business model and led the market in product innovation and subscriber economics, but we believe the incremental buying opportunity is in the earlier-stage Sirius."
Swinburne said Sirius will benefit from a more significant improvement in cost structure, and higher OEM penetration growth over the next 24 months relative to XM.
"We give XM the advantage today on products in the marketplace and OEM penetration," Swinburne said, "while Sirius seems to capture more mindshare in consumers on programming and marketing."