Market Overview

Bank Of America Remains Bullish On Planet Fitness, Says Core Still Strong

Share:

Planet Fitness Inc’s (NYSE: PLNT) stock has been added to the Russell 1000 Index and removed from the Russell 2000 Index. The pullback in the company’s stock due to this Russell rebalancing has created “a particularly attractive entry point,” according to Bank of America.

The Analyst

Bank of America’s Rafe Jadrosich maintained a Buy rating on Planet Fitness with a price target of $88.

The Thesis

Shares of Planet Fitness have declined by almost 10% over the last seven trading days and should recover quickly after the Russell rebalance, Jadrosich said in a note.

In mid-June, Planet Fitness’ largest franchisee United PF Partners added another 26 Planet Fitness clubs, taking the total to 152 clubs. Franchisee group consolidation and robust corporate margins imply that the company’s franchisee returns continue to be compelling.

Jadrosich mentioned that Planet Fitness continues to be a top pick given its industry-leading unit growth rate and same-store sales outlook, its pricing power on its premium membership, its significant potential for capital returns and the strong franchisee unit economics.

“Planet Fitness is relatively immune to many of the other issues causing volatility in the retail stocks including tariffs, e-commerce market share / investment spend pressure, rising wages, and a softer 1Q19 vs. expectations,” the analyst wrote in the note.

Price Action

Shares of Planet Fitness traded higher by 3.7% to $75.14 at time of publication Monday morning.

Latest Ratings for PLNT

DateFirmActionFromTo
Nov 2019MaintainsOutperform
Oct 2019UpgradesIn-LineOutperform
Sep 2019DowngradesBuyHold

View More Analyst Ratings for PLNT
View the Latest Analyst Ratings

Posted-In: Bank of America Merrill Lynch Rafe JadrosichAnalyst Color Reiteration Analyst Ratings

 

Related Articles (PLNT)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
TORCCantor FitzgeraldDowngrades3.0
CIDMCanaccord GenuityMaintains1.5
TDGCanaccord GenuityMaintains620.0
DLPNCanaccord GenuityMaintains1.6
WBCLSADowngrades
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com

"Brawny" Georgia-Pacific Muscles Way To "Shipper Of Choice" Honor

DOWN UNDER TRUCKING: Massive Multi-Vehicle Truck Crash Leaves Two Dead