Next Stop for Sirius XM: $4.25?

Price targets keep moving higher for Sirius XM Radio (NASDAQ: SIRI  ) .

Barrington Research is the latest analyst firm to raise its price for the stock that hit a five-year high last week. Barrington's new target is $4.25, up from $3.75. It's hard to keep an outperform rating on a stock when it's already hovering near your near-term goal.

Barrington had bumped its price target on the shares from $3 to $3.75 late last year.

Things have been clearly going well for Sirius XM. It now has more than 25 million subscribers for its satellite radio service. Sirius XM posted strong quarterly results last week, and even naysayers are starting to clear out. Sirius XM now has its fewest number of shares held short since last November.

Sirius XM is also taking advantage of its standing as a media darling -- and what may be the last golden opportunity to borrow at dirt-cheap rates -- by issuing new debt.

The satellite radio monopoly is announcing plans to offer $600 million of Senior Notes that will mature in eight years. Sirius XM will use the proceeds to help redeem debt that is due in two years. It should be able to fare considerably better than the 8.75% rate it had to shell out for those notes.

Sirius XM has been making the most of its newfound creditworthiness and ample generated free cash flow to eat its own cooking. The radio giant has spent $1.3 billion on stock buybacks this year, as Liberty Media (NASDAQ: LMCA  ) takes advantage of its majority stake in Sirius XM to make it a more bite-sized company for it or someone else to ingest.

More analysts should join Barrington above $4 in the coming months. Sirius XM has been surprisingly steady lately, and now that it's clear that satellite radio can capably withstand the onslaught of streaming alternatives and that Liberty Media isn't here to merely flip its stake, it's no longer a dangerous gamble for analysts to be optimistic here.

Sirius XM keeps inching higher, and no one will be surprised if Barrington raises its target yet again in a few months if Sirius XM finds its way above the $4 mark.

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