Napster "neutral"

01/15/07 - D.A. Davidson & Co.

NEW YORK, January 15 (newratings.com) - Analyst L Alan Davis at DA Davidson maintain their "neutral" rating on Napster Inc (NAPS). The 12-18 month target price is set to $4.50.

In a research note published on January 12, the analysts mention that the company has entered into a partnership with AOL, whereby it would be the exclusive music subscription provider for AOL Music. This partnership is likely to increase the number of subscribers by more than 60% and offer Napster a more cost effective way to add subscribers going ahead, the analyst says. The partnership is likely to be accretive to the company’s FY08 revenues by about $35 million, DA Davidson adds.