Peloton Interactive (PTON) Stock: $24 Price Target And Overweight Rating

By Amit Chowdhry ● May 13, 2022
  • The shares of Peloton Interactive (NASDAQ: PTON) have received a $24 price target from JPMorgan. These are the details.

The shares of Peloton Interactive (NASDAQ: PTON) have received a $24 price target from JPMorgan. And JPMorgan analyst Doug Anmuth reiterated an “Overweight” rating on the shares.

Anmuth adjusted the rating as the company is early in a turnaround as reflected by the significant free cash flow burn and the light CF Subscriber outlook for the fourth quarter. And Anmuth said that the new CEO Barry McCarthy is making early progress across 3 key priorities: stabilizing cash flow, organizing talent, and returning to growth.

“PTON continues to expect $800M in annual run-rate savings by FY24 & it is focused on working down elevated inventory levels, w/the key near-term goal to be FCF positive in FY23,” wrote Anmuth in a research note. “PTON will also take on $750M in debt to shore up the balance sheet, which should adequately address capital needs until FCF generation in 2HFY23. The term loan capital raise may have disappointed some investors who were hoping a strategic investor might step in for a 15-20% stake as suggested by The WSJ last week. But we believe PTON would only do a deal at depressed levels if it carried very significant strategic advantages and could massively accelerate growth.”

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