Investor Alert

New York Markets Close in:

The Ratings Game Archives | Email alerts

Oct. 11, 2021, 12:52 p.m. EDT

Peloton stock can soar nearly 80% to KeyBanc analyst’s new price target

Watchlist Relevance

Want to see how this story relates to your watchlist?

Just add items to create a watchlist now:

  • X
    Peloton Interactive Inc. (PTON)
  • X
    Consumer Discretionary Select Sector SPDR ETF (XLY)
  • X
    S&P 500 Index (SPX)

or Cancel Already have a watchlist? Log In

Tomi Kilgore

Shares of Peloton Interactive Inc. got a lift Monday, after KeyBanc analyst Edward Yruma said the recent selloff presented a “compelling” opportunity for long-term investors to buy, as recent Bike price cuts should offset a slower Tread ramp.

The stock /zigman2/quotes/208035743/composite PTON -5.02% rose 1.2% in midday trading Monday. It has bounced 5.9% since closing at a 13-month closing low of $82.35 on Oct. 4, but was still trading at almost half the record closing price of $167.42 on Jan. 13.

The weakness this year resulted from investor concerns over the impact of the lifting of COVID-19-related restrictions, such as gym reopenings; the backlash from the company’s response to a recall of treadmills, after reports of injuries and a death; and increasing competition.

Read : Peloton stock sinks to 8-month low after 125,000 treadmills recalled for ‘risk of injury or death’

Also read : A bunch of fitness companies are jumped into the IPO market this year. It’s not working out .

After a brief bounce over the summer, the stock’s selloff resumed in late August, after the company reported a much wider-than-expected quarterly loss, as cost of revenue more than doubled to outpace revenue growth of 35%.

Don’t miss : Peloton cuts bike price, predicts a pause in its pandemic boom, and its stock falls .

KeyBanc’s Yruma reiterated the overweight rating he’s had on the stock since a month after the company went public in September 2019 . He cut his price target by 16%, to $155 from $185, but the lower target still implied 77.8% upside from current levels.

“While we acknowledge [near-term] concerns about reopening and Tread, we think recent weakness presents a compelling [long-term] entry opportunity,” Yruma wrote in a note to clients. “

He said his research shows that Peloton is taking “more aggressive steps” in trying to explain to potential customers why its Tread product and the whole-body workout that goes with it is better than conventional treadmills.

Meanwhile, Yruma said his field work has shown there has been a “strong response” to the reduced prices for Bike products, which suggests the “offensive move” to lower prices should help Peloton maintain its outsized share of the at-home spin bike market.

He also believes Peloton has a “significant opportunity” to benefit from revenue streams from other devices, such as a rowing machine, and other subscriptions, as well as apparel.

The stock has shed 29.1% over the past 12 months, while the SPDR Consumer Discretionary Select Sector exchange-traded fund /zigman2/quotes/200844504/composite XLY -3.35% has rallied 19.5% and the S&P 500 index /zigman2/quotes/210599714/realtime SPX -1.52% has climbed 26.5%.

US : U.S.: Nasdaq
$ 13.99
-0.74 -5.02%
Volume: 5.83M
May 20, 2022 1:54p
P/E Ratio
Dividend Yield
Market Cap
$4.91 billion
Rev. per Employee
US : U.S.: NYSE Arca
$ 138.11
-4.79 -3.35%
Volume: 5.12M
May 20, 2022 1:54p
-59.14 -1.52%
Volume: 1.60B
May 20, 2022 1:54p

Get news alerts on Peloton Interactive Inc. — or create your own.
This Story has 0 Comments
Be the first to comment
More News In

Story Conversation

Commenting FAQs »

Partner Center

Link to MarketWatch's Slice.