Cooperation with Amazon.com, Inc. and YouTube is likely to spark a new wave of growth! Deutsche Bank supports Sirius XM (SIRI.US): the stock price still has over 50% potential for increase.

Deutsche Bank Aktiengesellschaft has upgraded the rating of Sirius XM (SIRI.US) stock from "Hold" to "Buy," raising its target price to $45, which is one of the highest target prices on Wall Street, indicating a potential upside of 51% from Thursday's closing price. Analyst Bryan Kraft pointed out that Sirius XM's partnerships with two tech giants, which have not yet been fully appreciated by the market, could mean that its stock price is likely to continue rising significantly after a strong increase this year. Deutsche Bank analysts believe there is considerable room for Sirius XM's stock price to rise. Bryan Kraft is becoming one of the few bullish analysts on Sirius XM, a satellite broadcasting company, which is a rare sentiment on Wall Street. Among the 14 analysts tracked by the media, only 5 currently recommend buying the stock; the average target price among analysts is about $33, indicating an 11% upside. Sirius XM's stock price has risen nearly 50% this year, far exceeding the 14% increase in the S&P MidCap 400 Index. Bryan Kraft expects that as Sirius XM establishes partnerships with Amazon.com, Inc. (AMZN.US) and Alphabet Inc. Class C (GOOGL.US) subsidiary YouTube, the companys growth will begin to accelerate. He stated, The stock is currently trading at a significant discount to its intrinsic value, and as the company transforms into one with a healthy growth rate, we should see a revaluation. According to aggregated data, Sirius XM is forecasted to generate about $8.6 billion in revenue by 2025. The current market consensus expects that the company's annual revenue growth rate will remain in the low single digits until 2029, at which point sales are projected to reach $9.1 billion. However, during this period, the market expects the companys earnings to grow annually at close to or reaching double digits, with this years earnings growth expected to be 30%. Bryan Kraft's bullish logic on Sirius XM lies in the fact that the company is becoming the exclusive audio advertising representative for YouTube in the U.S. He estimates that this partnership could bring an additional $2 billion in incremental revenue to Sirius XM each year by 2029, contributing $350 million to $400 million in EBITDA. He said, Just this alone is enough to make Sirius a growth company again. You almost need to take a step back to truly realize how significant this is, as it is not even accounted for in the current market earnings expectations. Bryan Kraft also believes that the expansion of Sirius XM's partnership with Amazon.com, Inc.'s demand-side platform will act as a tailwind for revenue growth. The advertising revenue from Sirius XM and Pandora's off-site business is expected to account for over 20% of the companys total revenue by 2025. Currently, Sirius XM's expected price-to-earnings ratio is about 9 times, which is 50% lower than the average level over the past 10 years, and also lower than the broader S&P MidCap 400 Index, which currently has an expected price-to-earnings ratio of about 16 times. Bryan Kraft added, Right now, this stocks valuation multiple reflects a company that is not growing, but as the company begins to realize the opportunities from these partnerships, we expect the market to revalue it to reflect a positive growth outlook.