Berkshire Hathaway Inc. BRK BRK, a company with Warren Buffett as the majority shareholder has increased its stake in audio entertainment company Sirius XM Holdings Inc. SIRI despite its underperformance in 2024 and reigning analyst price cuts.
What Happened: According to Form-4 filed by Berkshire with the U.S. Securities and Exchange Commission (SEC) on Feb. 3, 2025, the company disclosed its ownership in Sirius with 108,719,088 shares, as of Oct. 11, 2024. This represents an over 30% stake in Sirius.
Dave Gretta, a business system analyst at the Hut Group and the author of ‘Across The Street From Wall Street’ in an X post said, “No idea why he bought this stock.” Gretta added that the stock pays a dividend but the investors are better off investing in Treasury bills with higher returns.
The company has a modest dividend yield of 4.20% with a market capitalization of $8.759 billion, according to Benzinga Pro. Further, Sirius is valued at a forward price-to-earnings ratio of 8.446 as compared to the industry average of 25.750, which makes it over three times less expensive than its peers.
However, Benzinga Pro data suggests that the shares of the company slumped by 58.46% in 2024 and it has fallen by 48.60% over the last year.
Why It Matters: Apart from the decline in 2024, the 18 analysts tracking the company according to Benzinga have a consensus ‘hold’ rating on the stock.
Most recently, Rosenblatt cut the company’s target price from $29 to $24 per share on Feb. 3 maintaining a ‘neutral’ rating, whereas Barrington Research slashed the price from $30 to $28 apiece on Jan. 31, with an ‘outperform’ rating.
According to a report by Markets Insider, Barrington Research believes that leverage remains manageable despite increasing after the Liberty transaction. Strong cash flow is expected to support debt reduction and increased capital returns.
Guggenheim lowered its price target to $29 from $30, maintaining a “buy” rating on Jan. 31, as reported by Investing.com. The firm cited a reassessment of subscriber dynamics, including a shift away from promoting its streaming-only service and the upcoming FTC “click to cancel” rule.
The ratings from Rosenblatt, Barrington Research, and Guggenheim suggest a $27 target, implying a potential upside of 4.25%.
Price Action: Sirius closed 1.63% higher at $25.86 apiece on Monday and added 0.21% in after-hours, whereas the exchange-traded fund tracking Nasdaq 100 index, Invesco QQQ Trust, Series 1 QQQ was up 1.21% to $529.25, slipping 0.16% in after-hours.
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