SIRIUS XM Radio (SIRI)

We upgrade our recommendation on SIRIUS XM Radio (SIRI - Analyst Report) to Outperform, based on its huge subscriber additions, launch of new SIRIUS XM 2.0 radio, improved credit ratings and better financial outlook. The company reported highly improved financial results for the third quarter of 2011, beating both the top and bottom line Zacks estimates.

Moreover, the company will get pricing flexibility starting this quarter, after the completion of a stipulated FCC regulation. The pricing flexibility will be a great boost for the company's top-line growth.

Huge subscriber additions coupled with an upgraded S&P credit rating from BB- to BB and the launch of new SIRIUS XM 2.0 will drive the stock going forward. We thus upgrade our rating to Outperform with a price target of $2, based on 28.6x our fiscal 2011 earnings estimate.

SIRIUS XM Radio (SIRI) : FULL ANALYST REPORT

Read the full analyst report on SIRI