NEW YORK ( TheStreet) -- Sirius XM ( SIRI - Get Report) spiked to a new 52-week of $1.88 in trading early Monday after Wunderlich Securities raised its price target on the satellite radio company stock to $2 from $1.75.

Wunderlich analyst Matthew Harrigan maintained his buy rating on Sirius and raised his price target on the stock one day ahead of the company's fourth-quarter report. Sirius is slated to release its earnings numbers on Tuesday.

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Harrigan provided a multitude of "sensitivity analysis" related to car sales, subscriber growth, and the effects of Internet radio, such as Pandora.

"Pandora is apt to get even more notoriety after having just filed for an IPO," Harrigan said in his Feb. 14 research note to investors.

He noted Pandora's growing number of listeners, which is now over 80 million, may prove the Internet radio service to be competition for Sirius. "It is also the No. 1 iPad and No. 2 iPhone app download," he said. However, he believes that Pandora needs to "better monetize its music genome project" via subscriber revenues.

"Sirius' 2010 growth implies that Pandora may be more of a complement than replacement," he said, "with Sirius having so much distinctive sports and talk personality content -- even after losing Bubba the Love Sponge this January."

Sirius will benefit as the rate of U.S. auto sales normalizes to a base of about 15 million by 2015, he said.

Harrigan estimates that Sirius gained 297,000 customers in the fourth quarter. He predicts the company will report sales up 8.4% to $741.2 million in the quarter. He forecasts that the average revenue per user will be up to $11.87 from $11.81 in the third quarter of 2010.

He foresees free cash flow will come in at $104 million on a net loss of 1 cent a share.

Sirius shares recently climbed to a 52-week high of $1.80 after Morgan Stanley put an overweight rating and $2 price target on the stock.

Morgan Stanley said it expects Sirius' quarterly earnings to come in at $49.7 million, or 1 cent a share, compared with 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 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 Autodata.

"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.

Sirius shares opened at $1.87 and climbed to a high of $1.88. Shares have since fallen 2 cents to $1.83.

--Written by Theresa McCabe in Boston.

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