Many investors have grown tired of Wall Street analyst reports that keep telling them to Buy a stock that has gone up and then selling the stock after it has gone way down. This age-old ritual in some ways may be unavoidable due to the nature of sentiment and market action. What about when analysts upgrade a stock shortly after has hit a 52-week low?

Credit Suisse has raised its rating on Sirius XM Holdings Inc. (NASDAQ: SIRI) to Outperform from Neutral while maintaining a $7 target price.

As for when the last time Credit Suisse made a formal ratings change, the firm downgraded Sirius XM to Neutral from Outperform back on September 25, 2018, when shares were at $6.22 ahead of that call. While its first Outperform rating may have come with a small stop loss for some investors, this also averted more pain as the shares were last seen at $5.31 ahead of this latest upgrade. And Sirius XM hit a 52-week low of $5.23 as recently as June 3, 2019.

Credit Suisse’s Brian Russo and team see positive operating trends with the Pandora acquisition behind it. The team expects about a million net subscriber additions in 2019, despite a 3% decline in seasonally adjusted rates, along with stable account churn and about 2% growth in revenue per user.

As far as potential upside to the consensus, 2019 consensus EBITDA has fallen by about 5%, and free cash flow expectations have come down by about 8% since October. Russo further noted that Sirius XM management has a long track record of beating guidance.

Credit Suisse also added in another $79 million in revenues for 2019 after incorporating Pandora’s gains into the model. It raised the EBITDA estimate by about $89 million to $2.39 billion and raised its free cash flow by $8 million to $1.612 billion. Expected revenue in 2020 was raised by $119 million to $8.18 billion, and it added $169 million for EBITDA to end at $2.612 billion. It raised its 2020 free cash flow estimate by $191 million to $1.92 billion.

As far as an attractive entry point and updating its numbers, Russo said:

Since announcing the Pandora acquisition in September, Sirius XM shares have fallen 15% versus the S&P 500 down 2%. At current prices, Sirius XM trades at approximately 15 times estimated 2019 free cash flow per share, its lowest valuation on this metric over the past 2 years (and versus about 17 times its 2-year average… Our target remains $7.00, based on 18-times our 2019 expected EBITDA.

While Russo highlighted that the risks include a further slowdown in U.S. auto sales, streaming competition, Pandora trends deteriorating versus expectations and content costs, the firm has an upside scenario (Blue Sky) of $7.50 and a downside scenario (Grey Sky) of $4.50.

Shares of Sirius XM were last seen trading up 1.7% at $5.40, with a 52-week high of $7.70 and a Refinitiv consensus target price of $6.81.

Credit Suisse’s upside target price is calling for nearly 32% upside from Friday’s closing bell. Most Dow Jones industrial average and S&P 500 targets are given 8% to 10% upside with new Buy/Outperform ratings at this stage in the 10-year old bull market.

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