Deutsche Bank upgraded XM Satellite Radio (XMSR ) to buy from hold.
On Thursday XM Satellite posted a $1.38 second-quarter consolidated loss. Analyst Jeffrey Shelton says the second quarter was in line with estimates. He raised the 2003 subscriber target from 1.20 million to 1.25 million, slightly above XM Satellite's guidance. He notes the company now expects to launch its spare ground satellite in the fourth quarter of 2004, a year earlier than he anticipated, and to fund the construction of a new satellite in 2005.
Based on second-quarter results, improved subscriber forecasts, and the expectation of continued improvements per subcriber economics, Shelton raised the $11 target to $13. Combined with a sell-off in shares, which he believes was overdone, he upgraded.