🔥 Premium AI-powered Stock Picks from InvestingPro Now up to 50% OffCLAIM SALE

Deutsche Bank cuts Sirius XM shares target, cites subdued growth forecasts

EditorEmilio Ghigini
Published 05/01/2024, 05:48 PM

On Wednesday, Deutsche Bank revised its price target for Sirius XM Radio (NASDAQ:SIRI) shares, decreasing it to $3.75 from the previous $5.00, while keeping a Hold rating on the stock. The adjustment comes as the bank sets a more conservative valuation outlook for the satellite radio company, citing uncertainties in the company's future growth.

The bank's analyst pointed to revised lower estimates for Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) and Free Cash Flow (FCF) as primary reasons for the price target reduction. The analyst emphasized that the new valuation reflects the challenges in foreseeing a return to sustained positive subscriber and EBITDA growth for Sirius XM.

Currently, Deutsche Bank is not projecting growth in Sirius XM's subscriber numbers or in its consolidated EBITDA for the upcoming six-year period. This projection is based on a valuation perspective that suggests Sirius XM's stock should trade at an Unlevered Free Cash Flow (UFCF) yield that aligns with the company's Weighted Average Cost of Capital (WACC) of approximately 8%, as estimated by Deutsche Bank.

The lowered price target indicates a more cautious stance on the stock's potential performance, given the lack of visibility into key growth metrics. Sirius XM's stock performance and future financial results will be closely watched by investors as the company navigates the challenges outlined by Deutsche Bank.

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

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.