SiriusXM Holdings (SIRI) near-term cyclical risk fears have been partially reduced due to an enhanced macroenvironment, Morgan Stanley said in a Wednesday note.

The expanded bonus depreciation rules, under the recently passed One Big Beautiful Bill Act, reduce the company's cash tax expectations in 2025 and 2026, raising free cash flow estimates by 3% to 4%, the note added.

"These are encouraging developments for SiriusXM, and every quarter that elapses with the company de-levering without cyclical pressures adding to secular challenges improves the risk/reward in shares", the note said.

Additionally, Morgan Stanley said it continues to see further "compelling opportunities" elsewhere in telecom & cable services business.

Morgan Stanley raised SiriusXM's price target to $22 from $21 and maintained an underweight rating on the stock.

Shares of the company were down more than 3% in recent Wednesday trading.

Price: 22.96, Change: -0.90, Percent Change: -3.75