Peloton Interactive Inc [NASDAQ: PTON], a fitness and exercise equipment company had its shares rise after a bullish analyst increased his price. Peloton has seen its share price rise by 470% in the last year, raising the value of the company to $37.9 billion. COVID-19 pandemic played a significant role in its growth as gyms closed down forcing most people to workout at home. The bullish analysts are expecting this trend to continue even after the gyms reopen.
According to FactSet, the mean price current target is about $116.33 even though the stock is mostly bought from Wall Street analysts. A few bullish analysts have set their targets lower than the current level, but might be forced to evaluate their models to catch up or bring down their ratings.
Some analysts that have raised their targets to include;
Jonathan Komp, a Baird analyst that has raised his from $120 to $140. He expects Peloton momentum to continue.
Truist analyst Youssef Squali on Wednesday raised his projection from $115 to $140 following a survey that interviewed about 1,500 consumers checking on their exercise habits. The survey painted a good picture of the future of the exercise equipment market.
Out of 1,169 respondents that exercised at home, at least 54% bought a piece of equipment to work out at home. 40% of those who made such purchases said that they had no plans to buy the exercise equipment before the pandemic, while 23% of those planning to buy some sort of equipment is projecting to spend more than$1000. 19% of those planning to make such purchases named Peloton as their brand of choice. It was the highest-ranked. Out of those who name Peloton, 44% are from households making less than $75,000, discrediting the notion that Peloton is a brand for only a specific niche of affluent clientele. 32% of them were between 18 to 34 years. This data shows that the brand is not only for less affluent individuals but also is a choice for most young people.
Following these developments, Peloton share price rose by 0.4% to a closed on a new high of $131.4 on Wednesday, while the S&P index went down by about 0.7%. The current excitement of the company’s stock and its run on Wall Street is pushing the bar high for the company’s earnings reports to come next month. It is currently trading at 9.61 times that the estimated price for the next 12 months. It must maintain its bullish run to cushion it on Wall Street