Peloton’s future treadmill and bike that is lower-priced will play a vital part in lifting shares through 2021, analysts at Bank of America stated Thursday.
The exercise hardware organization’s stocks leaped 65% within the month that is last investors increasingly bet on stay-at-home styles to linger. Bank of America is similarly bullish. Analysts led by Justin Post raised their price target for Peloton to $150 from $116 in a note to clients, implying a 14% rally from Wednesday’s close on the next 12 months.
Delivery delay data gathered this month suggests product sales continue to track well above their amounts which are pre-pandemic according to the bank. Your order backlog signals a quarter that is strong, and the opening of the brand new factory in December can potentially double Peloton‘s output. Few the production that is increased by having an expanded lineup and Peloton is poised to help keep its robust stock momentum in the months ahead, Bank of America said.
“With increasing COVID cases worldwide, we think elevated health problems and item that is new could drive strong holiday need and proceeded upside to Street quotes,” the group said.
Read more: 200-plus money supervisors pay thousands to see which stocks are on Jim Osman’s purchase list. He details 2 he sees doubling and says you’ve got at least 50% left to soar. Bank of America maintains a “buy” rating on Peloton stock. The organization has 41 “buy” ratings, three “hold” ratings, and one “sell” rating from Wall Street analysts.
Investors will discover the very first boost that is major in the 1st quarter of 2021 when Peloton is slated release a its very first treadmill. The marketplace for such equipment is between two and three times as big as the stationary bike market, starting the company to rapidly expand its total market that is addressable Bank of America stated.
A bicycle that is refurbished launch later next year and attract lower-income households previously priced out of Peloton’s lineup, the analysts added. The introduction of both products that are new lift how big Peloton’s addressable market to 25 million from 20 million, according to the note.
The resurgence of COVID-19 cases throughout the US also curbs one of the greatest dangers to Peloton’s valuation: gym reopening. A revival of physical gyms would cut into Peloton’s addressable market, as its options that are lower-cost still priced considerably more than budget gymnasium memberships.
The company’s metrics could be artificially inflated also by pandemic-specific styles, the analysts said. Should recovery accelerate and those boosters subside, shares would likely have a more trajectory that is bearish. Peloton’s future treadmill and bike that is lower-priced will play a vital part.
Peloton traded at $134.60 per share as of 2:50 p.m. ET, up 388% year-to-date.