Peloton a favorite at BofA on long-term potential

Nov. 11, 2020 9:58 AM ETPeloton Interactive, Inc. (PTON)PTONBy: Clark Schultz, SA News Editor17 Comments
  • Bank of America is positive on Peloton Interactive (PTON -5.0%) following the Beyoncé announcement and on a generally strong view of the long-term potential.
  • Analyst Justin Post: "We think Peloton is building a content advantage that starts with its premium instructors. Peloton’s deal with Beyoncé will add new premium content, and we can envision deals with other recording artists and sports personalities. (We think Peloton’s size/scale advantage in the category will enable the company to sign the best content partnerships in the sector, keeping the workout content fresh.)"
  • Post notes that the 25-34 year-old age group is the fastest growing segment for Peloton bike consumers, which he calls a huge opportunity. When bike demand eventually slows, Peloton can lower bike ASPs, launch certified pre-owned bikes and add more targeted content partnerships to unlock even more demand in the age group.
  • "We think Peloton’s long-term outlook is much improved over past 6 months (more established leadership in category, more visibility on product pipeline, and gym closures). We remain bullish on a strong product slate ahead that should help Peloton grow through more difficult COVID comps in 2021, and potential for Street to see an expanding TAM."
  • Peloton is rated at Buy at BofA and assigned a price objective of $150.
  • It has been quite a ride for Peloton since its public debut.

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