(Sirius XM stock price poll updated with additional analyst commentary.)NEW YORK ( TheStreet) -- Howard Stern signed a new five-year contract with Sirius XM ( SIRI - Get Report) this morning, ending months of speculation regarding the shock jock's plans. His announcement came less than one month before his original five-year, $500 million deal was due to expire. Investors have waited on bated breath for any indication of Stern's plans for the past year. This morning, Sirius XM's share price spiked more than 10% to $1.44 in premarket trading on the news that Stern would be returning to satellite radio.
Sirius counts on a lineup of big-name talent from the worlds of media and entertainment to retain subscribers and attract new ones. Commercial-free listening would mean far less without the likes of a Howard Stern or Oprah Winfrey behind it, especially as Internet radio outlets like Pandora.com gain more ground and become more viable competition. >>Sirius XM: Hirings, Firings and Negotiations Subscribers are the most important source of revenue for the company, pulling in billions of dollars each year. On Nov. 30, Sirius announced that it had passed the 20 million subscriber mark, and reached the highest number of net subscribers in satellite radio history. Chief executive officer Mel Karmazin said he expects to end 2010 with the 20.1 million subscribers. Analyst Barton Crockett of Lazard Capital maintained his buy rating of the stock with a $1.65 price target in a Dec. 9 research note, as the risk of Stern's contract renewal won't exist for another five years. Analyst Greg Brown of Wunderlich Securities also maintains his buy rating of the Sirius stock, but with a higher price target of $1.75 on the recovering U.S. auto market and Stern's contract renewal. "Stern is a unique franchise and is virtually irreplaceable in the sense of not being able to placate Stern loyalists with other talking head personalities," Brown said in his Dec. 9 research note. Brown believes that Sirius is well-positioned to monetize Stern by keeping programming costs to a minimum. However analyst David Joyce of Miller Tabak rates Sirius as neutral with a price target of $1.60, as he believes that "while this talent retention should salvage Sirius' subscriber,
operating income before depreciation and amortization and free cash flow growth," the news that Stern is staying isn't enough to "chase the stock." Now that Howard Stern will be on for five more years, we want to know where readers of TheStreet think shares of Sirius XM are headed. Take the poll below to see the consensus of TheStreet. -- Written by Theresa McCabe in Boston. >To contact the writer of this article, click here: Theresa McCabe. >To follow the writer on Twitter, go to @TheresaMcCabe. >To submit a news tip, send an email to: firstname.lastname@example.org.