J.P. Morgan Securities upgraded both satellite radio providers XM Satellite Radio Holdings Inc. (XMSR) and Sirius Satellite Radio Inc. (SIRI) to "Overweight" ratings from "Neutral."   The report is citing subscriber growth rates for 2006 and 2007 and a possible merger between the two.

The firm believes that strong original equipment manufacturer growth will result in overall strong subscriber growth, even though growth will slow from 2006 levels.  It believes that auto-deals will help growth to more than 14 million subscribers for XM, and more than 15 million for Sirius by 2010. 

As far as any merger, J.P.Morgan XM and Sirius could potentially attempt a merger this year.  The total savings were put at $344 million, which would be worth $1.14 a Sirius share and $5.24 an XM share.

Jon C. Ogg
January 16, 2007