XM Satellite Radio Holdings "buy"

09/16/04 - Legg Mason

NEW YORK, September 16 (New Ratings) - Analysts at Legg Mason reiterate their "buy" rating on XM Satellite Radio Holdings Inc (XMSR). The target price is set to $35.

Shares of XM Satellite Radio Holdings Inc, is a provider of satellite radio services throughout the US, are currently trading at $29.46.

According to Legg Mason's research note published this morning, the company launched its Premium Online Music Service on September 15. The commercial-free music service is scheduled to begin in mid-October, the analysts add. During the launch, XM Satellite Radio Holdings announced an exclusive 30-day free trial offer for the customers of Dimension desktop computers and the Dell Inspiron notebook. Dell’s customers would also be entitled to receive XM Radio Online through the Dell Media Experience (DMX) portal, Legg Mason mentions.

According to the analysts, the monthly subscription fee for a new XM Radio Online subscriber is $7.99, while an existing XM Radio subscriber can receive the online connection at a discounted fee of $3.99. XM Radio Online would feature all of the XM Radio's music channels, along with two new channels, "On the Rocks" and Special X, Legg Mason points out. The analysts believe that the music service would offer healthy competition to the two existing services, Yahoo's Launche and Real Network's Rhapsody.

The EPS estimates for FY04 and FY05 are -$2.46 and -$2.46, respectively.

Legg Mason reiterates its "buy" rating on XM Satellite Radio Holdings Inc.