11:35 AM EDT, 09/24/2024 (MT Newswires) -- Sirius XM's (SIRI) limited outlook for subscriber and revenue growth indicates a risk of "further multiple compression," analysts at Morgan Stanley said in a Tuesday note.

"Expect limited growth in subscriber and financial results near term, with opportunity in SiriusXM's product initiatives taking time and manifesting gradually," Morgan Stanley said.

The risk to consensus net additions in 2025 and 2026 heightens the potential for further multiple compression, the analysts added. even though cost savings may help mitigate the impact on earnings.

"Cyclical risk skewed to downside, with a current mixed advertising market suggesting more balanced outcomes, but auto market more risk than upside," Morgan Stanley said.

In the near term, the focus will be on reducing leverage, while there is a longer-term opportunity for Sirius XM to increase free cash flow as it comes out of a capital expenditure cycle and repurchases share, it added.

Morgan Stanley resumed coverage of the company with an underweight rating and a $23 price target, indicating limited downside of about 10% but a risk or reward skewed downward over the next 12 months, the note said.

Price: 24.26, Change: -1.34, Percent Change: -5.22