SIRIUS XM Radio Inc. (NASDAQ: SIRI) is trading higher after a set of analyst upgrades this morning, well at least a set of two positive research calls. The satellite radio giant was initiated in analyst coverage with a Buy rating and the stock was assigned a $2.20 price target objective by Citigroup. It was also named as the BULL OF THE DAY by Zacks Investment Research.
The calls were based upon the move to profitability and aggressive subscriber growth targets ahead of the Sirius XM 2.0 radio launch.
The Zacks call was actually a raised rating to Outperform and the call was in part due to the company’s “pricing flexibility” that is set to start this quarter. 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.
Also noted was a recent upgrade by S&P from BB- to BB, which implies that Sirius XM is getting closer to investment grade.
Zacks has a $2.00 price target objective based upon a 28.6-times 2011 earnings estimate. Shares are trading up 3.5% at $1.76 in pre-market trading this morning.
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