Sirius Extends Partnerships with Nissan and Infinity, Reiterate $2.18

This week, Sirius XM’s (NASDAQ:SIRI) expanded its used-car effort by extending partnerships with Nissan and Infinity dealers and announced its coverage of NHL 2011-2012 season. The latter showcases that the company is not limited to just music, but rides on consumer taste for sports and other entertainment talk and thus keeps them hooked. Despite the stock trending lower over the last couple of weeks, we remain positive about the stock’s capability to recover as we maintain our $2.18 price estimate. We believe that Siriux XM has a good business model and partnering with automobile manufacturers such as Ford (NYSE:F) gives the company a very efficient way of marketing its service. Additionally, the price hikes in 2012 and the company’s attempts to increase its penetration in used-cars is likely to help it fight against possibility of economic slowdown affecting car sales  in the U.S.

A rapid economic slowdown is the main concern and competitive threats from companies like Pandora (NYSE:P) may not be significant unless Pandora expands well beyond music to include talk shows that will allow it to better penetrate the automobile segment.

Our price estimate for Sirius XM stands at $2.18, implying a premium of about 40% to the market price

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