PreMarket Prep Stock Of The Day: Peloton

Benzinga's PreMarket Prep airs every morning from 8-9 a.m. ET. During that fast-paced, highly informative hour, traders and investors tune in to get the major news of the day, the catalysts behind those moves and the corresponding price action for the upcoming session.

On any given day, the show will cover at least 20 stocks determined by co-hosts Joel Elconin and Dennis Dick along with producer Spencer Israel.

For those who don't have the time to tune in live or listen to the podcast, Benzinga will highlight one stock that merits further discussion. This analysis is not a buy or sell recommendation.

As second-quarter earnings season winds down, changes in Wall Street analyst ratings can be a major catalyst for price action.

That's the case with Peleton Interactive Inc. PTON, the PreMarket Prep Stock of the Day.

Peloton In Neutral Off IPO: Peleton made its market debut in September 2019 and ended that month at $25.10.

After gaining some early traction, it reached $37.02 in December, but its closing price at the end of February 2020 ($26.69) was not that far off its performance at the end of its first month of trading.

Peloton Goes Downhill With The Market: When the S&P 500 index cratered in March, it took shares of Peleton along for the ride. In fact, Peloton breached its all-time-low from October ($20.48), reaching $17.70 on March 16, which was a few days ahead of the index.

Could There Be A Better COVID-19 Play? With gyms, swimming pools and health clubs shuttered around the world, health enthusiasts are looking for a substitute.

For those who did not have their own exercise equipment and others who were looking to add more, Peleton is an excellent option.

As the pandemic worsened, Peloton's equipment was in short supply.

The author of this article listened to his wife and purchased a bike in January as a substitute for other forms of exercise.

For full disclosure: not only did we buy the bike, we bought shares of the issue as well.

Peloton's All-Out Sprint Off March Low: While the S&P 500 has added 64% off the March low based on Tuesday’s close, shares of Peleton pedaled far beyond that, trading 373% higher since March going by Tuesday's close of $83.67.  

JPMorgan Raises Peloton Price Target: Before the open Wednesday, the issue the issue kicked into another gear when it received a price target increase from JP Morgan from $58 to $105. 

When the issue was being discussed on the show Wednesday it was trading at the $91 area. Co-host Dennis Dick said the momentum may take Peloton to $100 eventually.

Peloton's Regular Session Price Action: After a higher open, it nearly matched its premarket high ($92.62), reaching $92.50 before reversing course. 

The ensing decline found support just under the top of Tuesday’s range ($84.63) and its closing price ($83.67), with the stock reaching $84.25 and resuming its move higher.

The stock was up 7.32% at $89.80 at the time of publication Wednesday. 

The brief discussion on the issue from today’s show can be found here:

Photo courtesy of Peloton.