Related Articles
On Friday, Seaport Global Securities adjusted its stance on Liberty SiriusXM Group (NASDAQ:LSXMA), downgrading the stock from Buy to Neutral. The firm’s analysis suggests that while Sirius XM (NASDAQ:) is projected to see an improvement in subscriber trends over the year, the largest losses are expected to occur in the first quarter of 2024, with a gradual improvement thereafter.
The analyst noted that cost-cutting initiatives and tax strategies, coupled with a pause in stock buybacks due to the impending merger of Liberty Sirius XM Group (NASDAQ:)’s tracking stocks, LSXMA and LSXMK, are positively influencing free cash flow conversion.
The gap in net asset value (NAV) between LSXMA and LSXMK has reportedly narrowed by half in the past month, currently standing at approximately 11.5%. This contraction in the NAV gap is a significant change from the previously estimated 15% discount that informed the firm’s $32 price target. Given this reduction and the expected closure of the combination of the tracking stocks, the potential for stock appreciation appears to be in the single digits.
The analyst’s revised view reflects a shift in the perceived value of the stock, with the reduction in the NAV discount from 15% to 10% and the anticipated near-term completion of the LSXMA/K combination. The analyst believes that these factors limit the upside potential of the stock, leading to the decision to downgrade the recommendation to Neutral from Buy.
Investors may note that the changes in Liberty SiriusXM’s stock rating and price target are based on the latest developments in the company’s financial strategies and the progress towards the combination of its tracking stocks. The market’s response to the downgrade and the anticipated merger will be observed as these events unfold.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
Source link
