Evercore ISI analyst Shweta Khajuria notes that intra-quarter data points on Peloton (NASDAQ:PTON) are largely negative, which proves that it will take some time before a new CEO can turn things around.
Therefore, the analyst sees a downside risk to the Street consensus on Connected Fitness Gross Profit for FQ3. More specifically, the analyst notes that ˜going to the gym comfort levels increased by 19ppts from February 11 to March 17."
We view these rising comfort levels for physical gyms as a growing headwind for PTON, ahead of a full reopening as consumers reconsider returning to gyms and going out to malls/movies/restaurants, Khajuria said in a client note.
The analyst reiterated his In Line rating and a $42.00 per share price target.
"We continue to believe that PTON shares may well be range-bound in the near-to-mid-term as we think PTON will likely face diminishing consumer demand (due to rising competition, higher equipment prices, reopening economies, lower marketing spend in seasonally slower months, and mix-shift in consumer spend towards experiences). While we are incrementally more optimistic with CEO McCarthy at the helm, we believe it will take some time before we see meaningful changes at PTON," Khajuria added.
Peloton stock price closed at $28.44 yesterday.
By Senad Karaahmetovic