Citigroup started covering XM Satellite Radio Holdings (XMSR ) at buy, citing the belief that the satellite radio industry is among the few growth stories in media.
Analyst Eileen Furukawa says XM should track the ups and downs of its growth in subscriber net adds. She notes that satellite radio has fast growing subcriptions, robust revenue growth, and attractive operating leverage. She expects to see profit for XM by 2007, with 35% free cash flow growth thereafter. She set a $43 price target on the stock.