- Today analysts at Bank of America (BofA) increased its price target of Peloton Interactive Inc (NASDAQ: PTON) from $116 to $150. These are the details.
Today analysts at Bank of America (BofA) increased its price target of Peloton Interactive Inc (NASDAQ: PTON) from $116 to $150. Merrill Lynch (wealth management division at BofA) Internet Analyst Justin Post pointed out that Peloton’s new products along with the stay-at-home trend will drive up shares will into next year.
And Bank of America also pointed out that the company’s treadmill product will cater to a market that is two to three times larger than exercise bikes. And Peloton will be able to access a larger potential customer base by offering a low-cost bike option next year. Specifically, the subscriber potential could be expanded to 25 million from 20 million. Next year, Peloton is also going to offer more refurbished bike options.
Bank of America has been tracking the delivery data this month for the company. And the sales are continuing to track well above the pre-pandemic levels. Plus the order backlog indicates strong results going into the next quarter.
Peloton will be opening up a new factory in a couple of months to address the surge in demand as well. The new factory should double Peloton’s output of its products.
“With rising COVID cases worldwide, we think elevated health concerns and new product launches could drive strong holiday demand and continued upside to Street estimates,” said the Bank of America team in the report via Business Insider.
Post also pointed that Peloton is “set up for a big holiday” as COVID-19 cases have been increasing in the U.S. and Europe heading into the winter. The winter months have historically been stronger periods of growth for Peloton, even before the pandemic.
The stock price of Peloton is up more than 440% since it went public and it is up more than 358% for the year-to-date.
Disclosure: I have a small position of PTON in my stock portfolio