Stern Killing Sirius (SIRI) with Lawsuit?

Shares of Sirius XM Radio Inc. (NASDAQ:SIRI) are falling out of favor, and the recent lawsuit against the company by Howard Stern could put another nail in the coffin of the company.

One analyst slashed his price target on Sirius and downgraded the company from "Buy" to "Hold" on the news of the lawsuit.

Wunderlich Securities analyst Matthew Harrigan concluded the stock's current price "likely cannot accommodate the uncertainty engendered by the suit - even if it ends up being meritless."

That speaks of high valuation and fragility as to the company growing in an increasingly challenging economic environment that is changing so quickly it's impossible to make solid conclusions concerning the prospects of a company; especially one so dependent on another industry to be successful, as Sirius is with the auto industry, which is under even more pressure after the earthquake in Japan.

Concerning the lawsuit, Sirius said it was "surprised and disappointed" by it.

Harrigan cut his price target on Sirius from $2 a share to $1.65. Sirius closed Wednesday at $1.669, down $0.036, or 2.11 percent.