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Sirius XM has named Sean Gibbons as its new Chief Product and Technology Officer. Gibbons is a veteran of the company and will now join the executive team, reporting directly to the CEO. He will be responsible for the technology behind the company's satellite and streaming services.
This role is important because Sirius XM is currently trying to move more customers toward its 360L platform, which blends satellite radio with internet-based features. Having a stable leader in charge of this technology is helpful, though an internal promotion like this is generally a routine part of running a large company.
Source: PRNewsWire
Deutsche Bank upgraded the company from a hold to a buy on Wednesday. The firm set a price target of $45, which is well above the current average analyst target of $34.
This is a major shift from a widely followed firm. It suggests a growing view that the company is undervalued as it tries to move more of its satellite radio listeners over to its newer streaming and digital apps. While the stock has struggled with slow growth, this upgrade points to confidence that the company can protect its high-margin subscription cash while it makes that transition.
Source: Deutsche Bank
Goldman Sachs raised its price target for Sirius XM to $32, up from $23 previously. This move brings the firm's target in line with the average across other Wall Street analysts. A price target is what an analyst thinks the stock will be worth in the future. This change suggests more confidence in the company's ability to generate cash as it moves more listeners from satellite-only plans to its newer hybrid streaming platform.
Source: Goldman Sachs
Sirius XM notified regulators of a change to its executive team or board of directors. These filings are required when a high-level leader leaves or a new one joins, as the people running the company have a direct impact on its strategy and how it spends its cash.
While the filing confirms a leadership shift, the long-term path for the business remains tied to how well it can keep car owners subscribed to its satellite service. For now, this is a routine part of corporate management and does not change our view on the stock's value.
Source: 8-K filing
Guggenheim raised its target from $34 to $35 while keeping a Buy rating. The move follows a second quarter where the company showed it can still grow its cash flow and keep churn, the rate at which customers cancel their subscriptions, at record lows. While the target increase is small, it reflects growing confidence that the company is managing its transition to digital streaming better than some feared. The stock currently trades below this target, suggesting the firm sees room for the price to rise as the business stabilizes.
Source: Guggenheim
The company has missed analyst expectations in five of the last eight quarters. This choppy record suggests management struggles to forecast its own business as listeners shift from satellite to streaming.
| Expectation | |
|---|---|
| EPS | $0.77 |
| Revenue | $2.15B |