The upgrade and why it matters
Deutsche Bank bumped Sirius XM to buy this week, with Bryan Kraft taking his target to $45 in a Sept. 2 note. From Thursday's finish, that price implies a 51% gain. He told Bloomberg, "The stock is trading at a pretty significant discount to its intrinsic value, and as it transforms into a company with a healthy growth rate, we should see a re-rating." He is one of the few bulls on the name right now.
Across the 14 analysts tracked by Bloomberg, five currently rate the shares a buy. Their average target sits near $33, which suggests about 11% upside from here. The stock has rallied nearly 50% so far in 2024, beating the S&P Midcap 400's 14% climb.
The ad partnerships driving the call
Kraft's case leans on two big-tech relationships. First, Sirius XM is set to become YouTube's exclusive US audio ad representative. By Kraft's math, that setup could deliver an additional $2 billion in yearly revenue by 2029 and contribute between $350 million and $400 million of EBITDA. "This alone puts Sirius back into being a growth company," he said. "You almost need to take a step back to appreciate how significant this is, because it isn't factoring into estimates at all yet."
He also points to a deeper tie-in with Amazon's demand-side ad platform as another push for growth across Sirius XM and its Pandora & Off-Platform business.
Rates, prices and policy all end up in your budget eventually. Get the free Market Briefs daily newsletter and see it coming.
The numbers and what to watch next
Sirius XM posted about $8.6 billion of revenue for 2025, and Bloomberg's consensus models call for low single digit sales growth each year through 2029, reaching $9.1 billion by then. Earnings are projected to rise at or near a double digit pace annually across that stretch, including 30% growth this year. Advertising tied to Sirius XM and Pandora & Off-Platform represented over one fifth of 2025 revenue.
Valuation is part of the pitch. The shares trade around 9 times forward earnings, roughly half the company's 10-year average and below the S&P Midcap 400 near 16 times. As Kraft put it, "Right now the stock's multiple is reflective of a company that isn't growing, but as it starts to execute on these relationships, we expect a re-rating that reflects the positive growth." Translation for your wallet: if those ad partnerships scale the way optimists expect, a stock priced like a slow mover could start getting treated like a grower.
