Peloton's Upcoming Products Trigger Higher BofA Price Target

Peloton Interactive Inc’s PTON new factory, which is expected to commence operations in December, could double its production capacity, according to BofA Securities.

The Peloton Interactive Analyst: Justin Post reiterated a Buy rating on Peloton Interactive and raised the price target from $116 to $150.

The Peloton Interactive Thesis: October month-to-date data suggests robust demand for Peloton into the second quarter of fiscal 2021, Post said in a Thursday note.

“COVID cases in both the US and Europe have increased as the weather has turned colder, which we expect to create incremental demand during Peloton’s peak season. We continue to anticipate a strong tread launch in the Winter that will expand the Street’s perception of Peloton’s TAM (Total Addressable Market),” the analyst said.

The analyst cited Peloton’s TAM Survey as indicating the size of the tread market being as much as three times the bike market.

The lower-priced tread launch should attract “a much larger audience for Peloton products,” he said. 

“We estimate Peloton’s L.T. subscriber potential at 25mn, up from 20mn previously.”  

PTON Price Action: Shares of Peloton Interactive were trading 2.72% higher at $135.01 at last check Thursday.

A man exercises on a Peloton Tread+. Courtesy photo.