Sirius XM downgraded at J.P. Morgan on slowing auto sales, rising spending
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Sirius XM (NASDAQ:SIRI) is getting a downgrade from J.P. Morgan, as the investment firm believes the broadcasting company has a number of near-term issues, such as slowing auto sales and rising spending, that are likely to impact "near-term sentiment and growth."

Analyst Sebastiano Petti lowered his rating to underweight, down from neutral, while cutting his price target to $6 from $7, citing slowing auto sales due to chip shortages and other supply chain issues, as well as rising spending as hurting near-term sentiment and growth.
"We expect SIRIâs 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.
Sirius XM (SIRI) shares are down more than 2% to $6.21 in pre-market trading. Sirius reports fourth-quarter earnings on February 1.
Though Petti noted there is the potential for a special dividend sometime this year, the analyst added he expects Sirius XM (SIRI) to add 500,000 subscribers this year, but free cash flow could be weaker than expected, due to slower growth, a ramp up in spending and increased taxes.
"With Liberty Mediaâs ownership now [more than] 80%, [Sirius] is likely to pare share repurchases in favor of higher dividends," Petti added. "Accordingly, our base case is now for SIRI to pay a $0.25 per share special dividend in 2022 in addition to the current quarterly dividend of $0.022."
On Thursday, Sirius XM (SIRI) acquired Cloud Cover Media, which offers a music-for-business service that expands the Sirius portfolio.