Merrill Downgrades Satellite Stocks
Merrill Lynch downgraded satellite companies XM Satellite (XMSR ), Garmin (GRMN ), and Sirius Satellite Radio (SIRI ).
Analyst Marc Nabi says for the near term, cuts XMSR to neutral from buy, SIRI to reduce/sell from neutral, and GRMN to neutral from buy. For the long term, he kept XMSR as buy, cut SIRI to neutral from buy, and kept GRMN as strong buy. He says his ratings revisions in digital audio radio service sector are mostly market-driven.
However, he has some concerns about SIRI, which began service nationwide on July 1. He says SIRI has the potential to be strategically well-positioned long term, but he has greater relative confidence in XMSR's ability to stay afloat today as it builds off inertia from operations currently in motion.