Pivotal Research Sticks to Its Buy Rating for Sirius XM Holdings Inc

In a report released today, Jeffrey Wlodarczak from Pivotal Research reiterated a Buy rating on Sirius XM Holdings Inc (NASDAQ: SIRI), with a price target of $7.75. The company’s shares closed yesterday at $7, close to its 52-week high of $7.03.

Wlodarczak observed:

“We raised our SIRI target price $0.70 to $7.75 driven nearly entirely by a move from a YE’18 target price to YE’19. Recall our target price is based on a discounted cash flow methodology (13X ’20 EBITDA (18X unlevered free cash) and an 8% discount rate). At our new $7.75 target SIRI would trade at 21X ’19 FCF [SIRI does not pay material taxes = ~23X AT)] vs. 19X (21X) currently. In our view, the, arguably, even better medium/long way to play SIRI is through controlling shareholder (~70%) Liberty Sirius-XM (LSXMK, BUY), which trades at what we view as a very attractive 30% (~$6.5B) discount to NAV, which is effectively their stake in SIRI. We believe it not a matter of if but when this gap disappears materially juicing returns over owning SIRI outright.”

According to TipRanks.com, Wlodarczak is a 4-star analyst with an average return of 7.6% and a 59.7% success rate. Wlodarczak covers the Services sector, focusing on stocks such as Liberty Media Corporation Series A Liberty SiriusXM Common Stock, Charter Communications, and Liberty LiLAC Group.

Sirius XM Holdings Inc has an analyst consensus of Moderate Buy, with a price target consensus of $7.15.

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The company has a one-year high of $7.03 and a one-year low of $4.94. Currently, Sirius XM Holdings Inc has an average volume of 16.48M.

Based on the recent corporate insider activity of 131 insiders, corporate insider sentiment is negative on the stock.

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Sirius XM Holdings, Inc. is a radio company. The company offers music, sports, entertainment, comedy, talk, news, traffic and weather channels, as well as infotainment services. Its brand channels include SiriusXM Traffic, SiriusXM Travel Link, NavTraffic, NavWeather, SiriusXM Aviation, Sirius Marine Weather, XMWX Aviation, XMWX Marine, and SiriusXM Marine.