Shares of Sirius XM Holdings gained 4.6% on Wednesday after Bloomberg reported that the company is nearing a contract renewal with its star podcaster Howard Stern. The satellite radio services provider’s contract with Stern is set to expire in December this year.
According to the report, Sirius XM (SIRI) would pay about $120 million a year to Stern as part of the renewed contract conditions. It is estimated that the podcaster was paid between $80 million and $100 million a year in the previous five-year contract period.
Following the Bloomberg report, B.Riley Financial analyst Zachary Silver said that “we believe that a potential renewal with Stern serves as a proof point that SIRI can continue to retain and attract top talent to its service.”
Silver further added that “With the Stern renewal potentially derisked, we recommend that investors take advantage of the recent weakness.” The analyst reiterated his Buy rating and the price target of $7.50 (29% upside potential) on the stock. (See SIRI stock analysis on TipRanks).
Currently, the Street has a cautiously optimistic outlook on the stock. The Moderate Buy analyst consensus is based on 9 Buys, 1 Hold and 1 Sell. With shares down 18.6% year-to-date, the average price target of $7.10 implies upside potential of about 22.1% to current levels.
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