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Benchmark cuts Sirius XM stock PT amid Liberty SiriusXM merger

EditorIsmeta Mujdragic
Published 03/27/2024, 11:52 AM

On Wednesday, Benchmark analyst's latest review has led to a revised price target for Sirius XM Radio (NASDAQ:SIRI), now set at $6.50, down from the previous $7.00, while the Buy rating for the stock remains unchanged. The adjustment reflects the anticipation of market shifts due to the expected third-quarter completion of Sirius XM's merger with Liberty SiriusXM, along with the evolving nature of Sirius XM's strategic initiatives.

The analyst pointed out that the revised price target now extends the expected timeframe for achieving this target into 2025. This change is attributed to the current market dynamics and the strategic movements within the company. Despite these adjustments, the analyst's outlook on the stock continues to be positive.

Berkshire Hathaway (NYSE:BRKa), a top shareholder in Liberty SiriusXM, has slightly increased its stake by acquiring an additional 2.6 million shares. This purchase brings Berkshire Hathaway's total ownership to 88.1 million shares, which includes both A voting and C non-voting classes, amounting to a 27% stake in the current basic shares of Liberty SiriusXM. The ownership translates to an approximate 23% interest in Sirius XM, which is expected to adjust to around 20% upon the completion of the merger.

The note also mentioned the narrowing of the NAV discount for Liberty SiriusXM (LSXMA) to 11%, down from nearly 40% at times last year. This contraction is primarily linked to the relative valuation pairing, with Sirius XM's own share price influencing the discount rather than an increase in Liberty's stock. The analyst emphasized that the discount calculation is based on a simple 8.4x deal share exchange ratio.

InvestingPro Insights

In light of the revised price target for Sirius XM Radio (NASDAQ:SIRI), real-time data from InvestingPro offers additional context for investors. The company's market capitalization stands at $14.83 billion, with a current P/E ratio of 11.86, indicating the company's valuation in relation to its earnings. However, this P/E ratio is slightly lower when adjusted for the last twelve months as of Q4 2023, coming in at 11.21. Additionally, Sirius XM's revenue for the last twelve months as of Q4 2023 was $8.953 billion, with a gross profit margin of 48.98%, showcasing the company's ability to maintain profitability.

From the InvestingPro Tips, two insights are particularly relevant to the article. Firstly, the RSI suggests that the stock is in oversold territory, which may interest investors looking for potential entry points. Secondly, the company has maintained dividend payments for 9 consecutive years, which could be a significant factor for income-focused investors. It's worth noting that there are 4 additional InvestingPro Tips available, providing further analysis and considerations for Sirius XM's stock.

Investors seeking a more comprehensive understanding of Sirius XM's stock performance and future outlook can find these additional InvestingPro Tips at https://www.investing.com/pro/SIRI. To enhance your investing strategy, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, offering valuable insights into market trends and company fundamentals.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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