Stifel analyst Kit Spring has issued an upgrade following DOJ approval of the merger between Sirius and XM.

REPORT EXCERPTS

Merger Synergies Underappreciated; Upgrading to Buy w/$18.40 Target

DOJ approved merger; stocks under-reacted: Despite an estimated$4.8B of synergies, XMSR and SIRI shares had a muted impact in our view indicating either skepticism on the size/timing of the synergies or a view that DOJ approval means there is too much competition. The 5.1% merger spread indicates a healthy degree of skepticism of FCC approval.

FCC approval likely to be next catalyst: We expect the FCC to approvethe merger within weeks with impositions that do not materially impact our $4.8B of merger synergies, which already include the concessions of a lacarte pricing, adult tiers, and price freezes. Unlikely surprise impositions that would reduce our synergies would be 1) required inclusions of HDradios (request by iBiquity) - too onerous as XMSR/SIRI does not make radios, and 2) spectrum giveback - unlikely as it would reduce benefits to consumers and adjacent WCS spectrum is still not being used.

Tyler Savery Position - Long Sirius, Long XM