SiriusXM Gets a Big Wall Street Endorsement

Summer is almost over. While much of the smart money vacationed at Martha’s Vineyard, Turks and Caicos and the Amalfi Coast, a low hum continued on Wall Street. Even during this sleepy stretch ahead of Labor Day, we saw one Wall Street analyst making a big call on a media company you don’t normally hear about. Meanwhile, Paramount and the state attorneys general tussled over who would cover the media company’s self-imposed ticking fees, while big name stars like Tom Cruise and George Clooney weighed in on the potentially industry-shaking merger. Enjoy the long weekend and thanks for reading. P.S. Money moves, companies change hands and the power map gets redrawn. At TheGrill on Sept. 30, the executives, investors and dealmakers behind those shifts get into what’s moving the business next. AI Creator Day is included on Sept. 29. Subscribers get 50% off through Sept. 8 with PROPERKS50. Getty Images Audio Is an Overlooked Category When it comes to smart investments, Deutsche Bank analyst Bryan Kraft likes what he’s hearing from satellite radio company SiriusXM. With an uncertain economy, banking on advertising might be risky, but Kraft said he sees digital audio advertising as an area that is being overlooked by others in the market. The strength in audio advertising is the basis for Kraft’s belief that SiriusXM stock price will benefit from higher multiples and that its upcoming earnings poised to top expectations. He has boosted his rating of SiriusXM to “buy” from “hold” and raised his price target to $45 a share from $31. The stock closed Thursday at $29.77. Deutsche Bank raised its rating on SiriusXM stock to “buy” with a $45 price target. The company in July raised both its full-year guidance for revenue and earnings before interest, taxes, depreciation and amortzation by $25 million. Deutsche Bank’s Kraft called the guidance conservative and increased his forecasts even more. SiriusXM is expected to get a boost in advertising revenues from a deal with YouTube. Berkshire Hathaway has been increasing its stake in SiriusXM. The report was issued this week following the news that Howard Stern will be returning to SiriusXM with a once-a-week show that will also be video streamed on HBO Max. One of the two channels that Stern programmed on the satellite service is being turned over to Bravo host Andy Cohen. Kraft didn’t mention Stern in is his buy recommendation, but he’s long been a key figure in the company. “We believe SiriusXM is mispriced based on a large disconnect between consensus estimates and what we believe the company can achieve in 2027 and 2028,” Kraft said in his report. “The opportunity is further enhanced by SiriusXM’s return to allocating capital toward share repurchases in the second half of 2026, as well as what we view as conservative 2026 guidance.” In terms of advertising, Kraft said that the deal that made SiriusXM the exclusive U.S. audio advertising representative for YouTube has been “completely disregarded” by Wall Street. Working with YouTube could generate $2 billion in annual incremental revenue by 2029 at a high-teen margin, which would boost earnings before interest, taxes, depreciation and amortization by $350 million to $400 million. Further ad revenue growth will come from an expansion of SiriusXM’s relationship with Amazon’s ad platform, which was announced in July. Kraft also expects that the revenue from SiriusXM’s subscription radio business will be steady as the company tries to deliver more value to consumers through companion subscriptions and the addition of more sports programming. He also expects a price increase next year. On its second-quarter earnings call in July, SiriusXM CEO Jennifer Witz said that the company “returned to positive net subscriber additions, increased ARPU and achieved the lowest churn in SiriusXM’s history.” CFO Zachary Coughlin said the company was raising its guidance for 2026 for revenue by $25 million to $8.5 billion and Ebitda by $25 million to $2.6 billion. Kraft more bullishly estimates that 2026 revenues will be $8.6 billion, up $76.8 million from his previous forecast, and 2026 Ebitda will be $2.7 billion, up $52.9 million. Spectrum Value Beyond its fundamentals, SiriusXM offers value because of the spectrum it controls, Kraft said. The FCC might restructure some of the spectrum the company no longer needs and that newly created band could be sold or leased. Another plot point in the SiriusXM story is that Berkshire Hathaway has been increasing its stake in the company. In its most recent filing, Berkshire Hathaway said it owned 37% of SiriusXM’s outstanding shares. With SiriusXM buying back shares, Berkshire’s stake could rise to more than 50%. “Will the [SiriusXM] board pivot to special dividends, a larger recurring dividend or ask Berkshire to sell into the buyback proportionately in order to avoid crossing the 50% threshold? Time will tell, but we don’t view this as a concern for the investment case,” Kraft said. DEAL SHEET Stan Kroenke agreed to buy the Los Angeles Angels Major League Baseball team from Arte Moreno in a deal that values the franchise at $4 billion. That sum tops the previous record price for an MLB team of $3.9 billion, which was paid for the San Diego Padres. Kroenke Sports & Entertainment already owns the L.A. Rams of the NFL, the Denver Nuggets of the NBA, the Colorado Avalanche of the NHL and the English Premier League’s Arsenal soccer team. Visko Platform Inc. raised $10 million in pre-seed funding led by Llama Ventures. Visko opened public access to Orbis, which generates and streams video in real time using AI. The company was founded in 2025 by Qing Yin, a Stanford Ph.D. who spent three years at Apple. WRAP 20 INDEX Here’s how the companies in our Wrap 20 Index performed this week. FINANCIAL ROUNDUP The Paramount-WBD Saga (Continued) It’s been a relatively quiet week on the Paramount Skydance-Warner Bros. Discovery front. The dozen attorneys general who have blocked the deal with an antitrust suit asked Judge Araceli Martínez-Olguin to deny Paramount’s request that the states post a $1.9 billion bond to cover the ticking fees and other costs resulting from delays in closing the transition. The AGs argued that Paramount should not be able to “offload its responsibility” after putting the ticking and breakup fees into the takeover agreement. Judge Martinez-Olguin set a hearing on the bond issue for Sept. 24. Meanwhile, in the court of public opinion, Hollywood celebrities expressed divergent opinions on the deal. Bradley Whitford, Hannah Einbinder, W. Kamau Bell and Jane Fonda appeared in a video opposing the deal. The video warns that “corporations make all kinds of promises to get mergers approved, and then they break them.” On the other hand, Tom Cruise said on “The Pat McAfee Show” that Paramount would deliver the 30 movies per year it is promising after the merger goes through. “I want us to come together as a community to help make those 30 movies,” Cruise said. “It’s not just going to be, you know, Paramount doing it. Everyone’s going to need all the help of every artist to be able to do it.” Another big star, George Clooney, went the opposite route, saying he wouldn’t endorse the deal. “I don’t see how the merger financially ends up making sense,” he said at a press conference at the Venice Film Festival.Skinny on National CineMedia Analyst Drew Crum at B. Riley Securities cut his target prices for National CineMedia’s stock price to $3.75 a share from $4 and created a pro-forma model anticipating National CineMedia’s $275 million acquisition of Captivate, which operates ad-supported digital video screens in elevators and lobbies. Crum “slightly” lowered his revenue and earnings estimates for the third quarter, citing box-office underperformance in July, partially offset by a record August. He said Captivate offers National CineMedia attractive revenue growth and profit margins but will leave the company’s balance sheet with more debt. “We think until the market gains comfort with elevated leverage (post-deal) and a perceived pivot in strategy, the stock may continue to trade sideways,” Crum said. National CineMedia shares closed at $2.49 Thursday. FROM THEWRAP Netflix vs. YouTube: Inside the Creator Talent Tug-of-War Bluesky’s Post-Election Boom Is Fading. Is Its Culture Playing a Role? Which Studio Has the Best Fall Movie Slate? 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