UPDATE: Morgan Stanley Reiterates Equal-Weight Rating, Raises PT on Sirius XM Radio

In a report published Monday, Morgan Stanley reiterated its Equal-Weight rating on Sirius XM Radio

, and slightly raised its price target from $2.60 to $2.85. Morgan Stanley noted, “Remain EW as valuation reflects solid fundamental outlook: SIRI continues to benefit from 1) YoY growth in auto sales, 2) a price increase that appears to be flowing into the sub base without major resistance, and 3) attractive incremental margins. Following better than expected 3Q sub growth (preannounce of +446K vs. +385K est), we are raising our estimates and PT. Our forecast now assumes 14.25M SAAR in 4Q12 and 2012 (rising to 15M in 2015E), and implies 1.85M net sub adds this year, modestly above revised 1.8M guidance. We are ~4% above '12 adj. EBITDA guidance of $900M.” Sirius XM Radio closed on Friday at $2.78.