Updated from Feb. 2.



) -- Shares of

Sirius XM

(SIRI) - Get Report

climbed to yet another 52-week high of $1.80 on Thursday.

The stock finished the day up 2.7% at $1.77 on heavier than normal volume. Roughly 94.2 million shares traded hands vs. the issue's trailing three-month daily average of 50.6 million.

The move comes after Sirius shares rose 6% on Wednesday when Morgan Stanley put an overweight rating and $2 price target on the stock with the release of the company's fourth-quarter report slated for Feb. 15.

Morgan Stanley expects Sirius XM's quarterly earnings to come in at $49.7 million, or 1 cent a share, compared to a loss of $25.2 million in the fourth quarter of 2009. The average estimate of analysts polled by

Thomson Reuters

is for a breakeven per share performance in the December period on revenue of $739.2 million.

Morgan Stanley believes growth in free cash flow and anticipated strong return of capital in 2012 and 2013 will drive Sirius XM shares higher over the next 12 to 18 months.

Analysts at the firm expect Sirius's net subscriber additions to be levered by strong U.S. auto sales. It sees the growth coming from both new and used cars, and estimates the company will be able to achieve annual EBITDA (earnings before interest, taxes, depreciation, and amortization) growth of between 15% and 18% through 2015.

"Despite questions surrounding growing competition like Internet radio and the strength of the consumer, consensus believes that Sirius can sustain subscriber momentum," Morgan Stanley said in Wednesday's research note.

Morgan Stanley expects to see 20% year-over-year growth in domestic car sales as consumer confidence grows. Auto sales are off to a strong start in the new year as new car sales in the U.S. grew 17.2% in January 2011, compared with the same month in 2010, according to



"Given the rebound in new car sales, subscriber adds will grow through 2010," Morgan Stanley said. It estimates Sirius will add between 1.3 million and 1.35 million net subscribers in 2011.

Morgan Stanley forecasts that Sirius's total fourth-quarter revenue will come in at $723.6 million, which would be about a 13% increase from its total revenue of $683.8 million in the same period in 2009.

-- Written by Theresa McCabe in Boston.

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