2023-07-21 07:42:45 ET
Sirius XM Holdings ( NASDAQ: SIRI ) shares fell more than 8% in pre-market trading on Friday after a few Wall Street analysts downgraded the stock after a "massive" run since last month.
Pivotal Research analyst Jeffrey Wlodarczak lowered his rating on Sirius XM Holdings ( SIRI ) shares to sell from hold, but raised his price target to $4.50 from $4, noting the 115% gain since June 21 is the result of a low liquidity rally that has boosted many of the most shorted names on Wall Street and a re-weighting in the Nasdaq 100.
"While the outlook for a soft landing has improved + auto [Seasonally Adjusted Annualized rate] is headed in the right direction and ’24 results should show a nice improvement it is frankly very difficult fundamentally to justify this valuation level for SIRI," Wlodarczak wrote in his note.
Wlodarczak also pointed out that Liberty Media Corp Series A ( NASDAQ: LSXMA ), which owns roughly 82% of Sirius XM Holdings ( SIRI ), has "barely" participated in the rally, only rising 17% since June 21, despite the fact it's the controlling shareholder of Sirius XM.
"Obviously, the fact that LSXMA owns ~82% (=relatively small float) and heavy SIRI short interest (likely driven by the investors pairing LSXMA/SIRI) is a major contributing factor to the performance variance," Wlodarczak added. "We estimate that LSXMA is now trading at a worst ever ~60% discount to its publicly traded assets."
Evercore ISI analyst Vijay Jayant also cut his rating on Sirius XM Holdings ( SIRI ) to underperform from in line after the run, citing a lack in change in fundamentals.
"We believe this move is related to a short squeeze in a stock with a small float rather than any fundamental change in the business," Jayant wrote in an investor note.
Sirius XM Holdings ( SIRI ) shares jumped 42% on Thursday and triggered multiple volatility halts.
Analysts are universally cautious on Sirius XM Holdings ( SIRI ). It has a HOLD rating from Seeking Alpha authors , while Wall Street analysts rate it a HOLD . Conversely, Seeking Alpha's quant system, which consistently beats the market, rates SIRI a HOLD .
More on Sirius XM
- Deeper Dive: The music industry is growing louder
- SiriusXM said to close Stitcher podcast app this summer
- Liberty Media wraps split-off of Atlanta Braves
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Sirius XM Holdings slumps as analysts downgrade after 'massive' run