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Sirius XM Radio Inc. (NASDAQ: SIRI) was a buyout target not that long ago. It turns out that John Malone and his team of Sirius XM insiders were conducting a low-ball offer of $3.68 per share. We first opined that this was hardly any premium, to the point that the Sirius XM shareholders would have gotten hosed in the deal.

One analyst research report is still wildly bullish on Sirius XM. Merrill Lynch maintained its Buy rating on the satellite radio leader. The firm’s $5.00 price target of $5 implies upside of more than 46%. Call it 50% if you round up.

Well, it turns out that the deal hosed shareholders anyway. Sirius XM shares are now trading around $3.42. The Wall Street analysts had a consensus price target of $4.60 prior to the buyout – or up 25% higher than what the buyout was. The consensus price target is now down to $4.25.

The Merrill Lynch call is led by Jessica Reif Cohen and team. The report shows that competition continued to increase in the radio industry during the second quarter. Apple made a bid to purchase Beats, T-Mobile announced its “Un-Radio” concept, and competition remains a risk for Sirius XM. Still, the team believes that Sirius has a stable position in the U.S. audio entertainment market.

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Cohen and her team at Merrill Lynch also see a moat with catalysts coming. Sirius XM’s focus is on exclusive talk content foremost and music second by an estimated 3:1 ratio. Sirius XM is engaged in outsized capital returns and the buybacks are a potential catalyst for shares.

The $5 price target is based upon an EBITDA multiple of 17.9x on 2015 with a 3 year growth rate of 20%. In late Monday trading right at the closing bell, Sirius XM’s stock was up 1% at $3.42 against a 52-week range of $2.98 to $4.18.