Zacks Investment Research Lowers Sirius XM (SIRI) to Hold
Zacks Investment Research cut shares of Sirius XM (NASDAQ:SIRI) from a buy rating to a hold rating in a report issued on Monday morning.
According to Zacks, “We are positive on Sirius XM's net subscriber growth. The company's commentary that the new tax law is likely to boost its cash generation to the tune of approximately $900 million over the next four years is also encouraging. Additionally, the decision of the company's board of directors to clear an additional buyback program worth $2 billion is a positive. The company's decision to hike quarterly dividends, announced last year, also raises optimism in the stock. In fact, shares of the company have outperformed its industry over the past month. However, high operating expenses and escalated debt levels raise concerns. Moreover, stiff competition may act as a major headwind for the company going forward.”
Other equities analysts have also issued research reports about the company. Buckingham Research increased their target price on Sirius XM from $6.50 to $7.00 and gave the stock a buy rating in a research note on Friday, February 2nd. Barclays increased their target price on Sirius XM from $4.50 to $5.00 and gave the stock an equal weight rating in a research note on Thursday, February 1st. Morgan Stanley increased their target price on Sirius XM from $5.35 to $5.50 and gave the stock an underweight rating in a research note on Monday, February 5th. Goldman Sachs increased their target price on Sirius XM from $5.00 to $5.50 and gave the stock a buy rating in a research note on Monday, February 5th. Finally, Royal Bank of Canada set a $6.00 price target on Sirius XM and gave the company a hold rating in a research report on Thursday, January 11th. Two investment analysts have rated the stock with a sell rating, six have assigned a hold rating, eleven have issued a buy rating and one has assigned a strong buy rating to the stock. The stock has an average rating of Buy and an average target price of $6.23.
Sirius XM (NASDAQ:SIRI) last posted its earnings results on Wednesday, January 31st. The company reported $0.05 earnings per share (EPS) for the quarter, hitting the Thomson Reuters’ consensus estimate of $0.05. Sirius XM had a negative return on equity of 79.79% and a net margin of 11.94%. The firm had revenue of $1.40 billion for the quarter, compared to analyst estimates of $1.40 billion. sell-side analysts expect that Sirius XM will post 0.24 earnings per share for the current year.
Sirius XM declared that its board has approved a share repurchase plan on Tuesday, January 23rd that allows the company to repurchase $2.00 billion in outstanding shares. This repurchase authorization allows the company to reacquire shares of its stock through open market purchases. Stock repurchase plans are often an indication that the company’s board believes its stock is undervalued.
The firm also recently disclosed a quarterly dividend, which was paid on Wednesday, February 28th. Stockholders of record on Wednesday, February 7th were issued a $0.011 dividend. The ex-dividend date of this dividend was Tuesday, February 6th. This represents a $0.04 dividend on an annualized basis and a dividend yield of 0.70%. Sirius XM’s payout ratio is currently 30.77%.
In other news, VP Thomas D. Barry sold 175,777 shares of the stock in a transaction dated Thursday, February 1st. The stock was sold at an average price of $6.11, for a total value of $1,073,997.47. Following the transaction, the vice president now owns 551,815 shares in the company, valued at approximately $3,371,589.65. The transaction was disclosed in a document filed with the SEC, which is available at this hyperlink. Also, Director Joan Lordi Amble sold 73,961 shares of the firm’s stock in a transaction that occurred on Wednesday, March 7th. The stock was sold at an average price of $6.50, for a total value of $480,746.50. Following the transaction, the director now owns 101,174 shares in the company, valued at approximately $657,631. The disclosure for this sale can be found here. In the last quarter, insiders sold 1,113,308 shares of company stock worth $6,822,521. Company insiders own 1.06% of the company’s stock.
A number of large investors have recently added to or reduced their stakes in SIRI. Carillon Tower Advisers Inc. purchased a new position in Sirius XM during the 4th quarter worth approximately $53,443,000. American Century Companies Inc. grew its stake in Sirius XM by 27.6% during the 4th quarter. American Century Companies Inc. now owns 44,612,437 shares of the company’s stock worth $239,123,000 after buying an additional 9,657,090 shares during the last quarter. Arrowstreet Capital Limited Partnership grew its stake in Sirius XM by 20.5% during the 4th quarter. Arrowstreet Capital Limited Partnership now owns 43,824,751 shares of the company’s stock worth $234,901,000 after buying an additional 7,449,602 shares during the last quarter. Amundi Pioneer Asset Management Inc. purchased a new position in Sirius XM during the 4th quarter worth approximately $26,702,000. Finally, APG Asset Management N.V. grew its stake in Sirius XM by 18.1% during the 4th quarter. APG Asset Management N.V. now owns 13,210,562 shares of the company’s stock worth $58,968,000 after buying an additional 2,024,500 shares during the last quarter. Hedge funds and other institutional investors own 20.01% of the company’s stock.
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About Sirius XM
Sirius XM Radio Inc broadcasts its music, sports, entertainment, comedy, talk, news, traffic and weather channels in the United States on a subscription fee basis through its two satellite radio systems. Subscribers can also receive certain of its music and other channels over the Internet, including through applications for mobile devices.
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