Deutsche Bank Backs Sirius XM on YouTube and Amazon Ad Tailwinds
Deutsche Bank's Bryan Kraft has upgraded Sirius XM to 'buy' with a price target of $45, suggesting a 51% gain from its current value. This upgrade is based on the company's partnerships with YouTube and Amazon, which Kraft believes will drive significant revenue growth.
Sirius XM is set to become YouTube's exclusive US audio ad representative, a deal that Kraft estimates could generate an additional $2 billion in yearly revenue by 2029. The partnership with Amazon's demand-side ad platform is also expected to contribute to Sirius XM's growth across its Pandora & Off-Platform business.
Kraft notes that these partnerships are not yet factored into the company's estimates, and as a result, he believes the stock will re-rate as it transforms into a growth company. The shares currently trade around 9 times forward earnings, which is roughly half the company's 10-year average.