Sirius XM (Nasdaq:SIRI) Shares Soar on Morgan Stanley (NYSE:MS) Rating

Shares of Sirius XM (Nasdaq:SIRI) are up about 6 percent in afternoon trading as the company got a big push from the "Overweight" rating given them by Morgan Stanley (NYSE:MS).

Looking forward to the earnings report of Sirius on February 24, Morgan Stanley analysts David Gober and Benjamin Swinburne said they see the company generating earnings of $49.7 million, or 1 cent a share. Analysts in general are expecting a quarter where Sirius breaks even.

The revenue outlook for the quarter is expected to reach $723.6 million, according to the Morgan Stanley analysts, which if that is the case, would be a big jump from the $683.8 million generated in the same quarter last year.

Everything for Sirius revolves around the health of the auto sector, and that has to be watched to measure their performance, including things like the recent jump in commodity prices which are affecting the automakers.

Morgan Stanley believes Sirius should have a strong return of capital next year and in 2013, along with growth in free cash flow. They see the shares pushing up over the next 12 to 18 months, which implies they think the auto industry should do well.

Morgan Stanley concluded, "Despite questions surrounding growing competition like Internet radio and the strength of the consumer, consensus believes that Sirius can sustain subscriber momentum."

Sirius XM was trading at $1.725, gaining $0.095, or 5.83 percent, as of 1:55 PM EST.