Sebastiano Petti, an analyst from J.P. Morgan, maintained the Sell rating on Sirius XM Holdings (SIRI – Research Report). The associated price target remains the same with $20.00.
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Sebastiano Petti has given his Sell rating due to a combination of factors impacting Sirius XM Holdings. One of the primary concerns is the anticipated challenges in fundamental growth, which are attributed to demographic shifts and the dilution of average revenue per user (ARPU) from a shift towards lower-priced subscription plans. This shift is expected to compress margins despite ongoing cost management efforts, and the company is also facing elevated capital expenditures in the near to medium term.
Additionally, the recent acquisition of Liberty Sirius is expected to increase leverage, which could halt share repurchases until 2027, potentially putting further pressure on the stock. Petti’s price target of $20 by December 2025 reflects these concerns, as it is based on a discounted cash flow analysis with a 10% weighted average cost of capital and a negative 1% perpetual growth rate. This target suggests a lower valuation compared to current market multiples, reinforcing the Sell recommendation.
According to TipRanks, Petti is a 3-star analyst with an average return of 4.7% and a 62.22% success rate. Petti covers the Communication Services sector, focusing on stocks such as Cogent Comms, AT&T, and BCE.