(Howard Stern Sirius XM contract article updated with additional analyst commentary.)

NEW YORK ( TheStreet) -- Shock jock Howard Stern announced he signed a new 5-year contract with Sirius XM ( SIRI - Get Report) this morning, ending months of speculation regarding his plans. His announcement came less than one month before his original 5-year, $500 million deal was due to expire.

The news may not come as a surprise, after the majority of TheStreet readers who took our poll said they thought Stern was going to stay on at Sirius. Of the 9,780 voters, 51.8% expected Stern to sign a contract with Sirius for two years or less, while 32.2% said he would sign a contract for 3 years or more. Only 16% of voters believed Stern would take his talent elsewhere.

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Analyst Barton Crockett of Lazard Capital said Stern's renewing with Sirius was "consistent with expectations."
Howard Stern
Howard Stern

In his Dec. 9 research note, Crockett maintained Sirius at a buy rating with a $1.65 price target as the risk of Stern's contract renewal won't exist for another five years.

While the financial terms of the agreement were not disclosed, Crockett said that flat programming costs indicate that Stern will continue to receive $80 million a year, consistent with his former deal.

Analyst David Joyce of Miller Tabak, who currently rates Sirius as neutral with a price target of $1.60, believes that Sirius is paying the shock jock $60 million a year.

Contrary to most analysts, Joyce said he would "not chase the stock" just because Stern is staying.

"While this talent retention should salvage Sirius' subscriber, operating income before depreciation and amortization and free cash flow growth," Joyce believes it isn't enough to move the stock much higher than $1.60.

Through the new Stern agreement, Sirius gains the right to transmit Stern's programming to mobile devices.

"I am especially excited that my show will now be heard through Sirius XM on mobile devices," Stern said. "Access to my show on mobile devices will open up additional opportunities for my fans to hear me wherever they are."

Management is confident that keeping Stern on will benefit the company in a variety of ways.

"Our agreement is good news on all fronts -- it is good for Sirius XM subscribers and good for Sirius XM stockholders," said CEO Mel Karmazin. "Howard forever changed radio and was instrumental in putting Sirius on the map when he first launched on satellite radio. He is one of the few one-name entertainers in the country and our 20 million subscribers are lucky to have him."

-- Written by Theresa McCabe in Boston.

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