Sirius XM Downgraded by Gabelli
NEW YORK (
) -- Gabelli analyst Brett Harriss downgraded
Sirius XM
(SIRI) - Get Report
to a hold from a buy rating, believing positive dynamics such as subscriber growth and lower programming costs are already priced into the stock.
"Sirius needs time to grow into its valuation," Harris said in his Nov. 9 research note.
Harriss projects that Sirius' subscriber growth will accelerate as the U.S. auto market recovers.
>>Howard Stern: Will He Leave Sirius?
"Satellite radio penetration is still low at 7.5% of U.S. vehicles, giving the company room to grow," he said.
In an Aug. 19 note, Harriss projected that the U.S. auto sales will recover to 14 to 16 million by 2014 after dropping 40% to 10.4 million in 2009 from about 16.7 million in 2005.
Harriss believes that Sirius has a strong fundamental business and that the stock could be worth $2.50 by 2014.
-- Written by Theresa McCabe in Boston.
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