UPDATE - JANCO Partners Upgrades Sirius XM (SIRI) to Buy; Penetrating the Lucrative Used Car Market

UPDATE - JANCO Partners upgrades Sirius XM (Nasdaq: SIRI) from Accumulate to Buy. JANCO's price target on Sirius moves from $2.15 to $2.50.

JANCO analyst said, "Sirius XM (NASDAQ: SIRI) announced that more than 1,000 General Motors dealers will offer a three-month promotional subscription on any (not just GM cars) satellite-radio equipped used car sold. We believe that this deal opens up a larger used car market opportunity for SIRI compared to the couple of Certified Pre-owned (CPO) deals the company has put in place. Considering that SIRI has over 60% market penetration of new cars, there are millions of satellite-radio equipped cars that roll off in the used car market offering incremental opportunity to the company. Furthermore, these potential subscribers have low acquisition cost and higher incremental margins."

"We realize that SIRI’s attempt to penetrate the lucrative used car market is in its early stages. However, there is little doubt that the used car market opportunity is sizeable (much like homes passed in the cable world). We believe that our aforementioned assumptions are fairly conservative. We will further fine tune our model as we get better evidence of the company’s traction in this market."

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