Shares of Sirius XM Holdings Inc. SIRI, -3.77% slid 3.8% toward a six-week low in morning trading Friday, after J.P. Morgan analyst Sebastiano Petti turned bullish on the satellite radio company, amid continued weakness in U.S. auto sales as semiconductor shortages and supply chain issues crimp supply. The stock is on track to snap a six-day win streak, which would be the longest such streak in 10 months. Petti cut the stock’s rating to underweight from neutral, and lowered the price target to $6 from $7. “We expect [Sirius’] initial 2022 self-pay net add guide to reflect a higher-than-usual level of conservatism given the uncertain new auto sales environment as the auto industry continues to work through chip shortages and other supply chain issues,” Petti wrote in a note to clients. The slower-growth outlook led him to lower his 2022 estimate for free cash flow, which also suggests reduced share repurchases. The company is expected to report fourth-quarter results on Feb. 1. While an expected announcement of a special dividend, which he expects to be 25 cents a share, could improve investor sentiment, “a slower buyback pace is likely to weigh on shares.” The stock has gained 1.5% over the past three months, while the S&P 500 SPX, -0.42% has advanced 4.8%.
