Peloton can rally 12% as demand continues to surpass supply in early 2021, Bank of America says
- Peloton's strong growth throughout 2020 is set to continue and lift shares to new heights, Bank of America said Tuesday.
- The bank's analysts lifted their
price targetfor the company to $175 to $150, implying a 12% rally from Tuesday's close over the next 12 months.
- The exercise-hardware manufacturer's deliveries were delayed by 10 weeks as of January 6, signaling demand still outstripped supply at the end of the holiday season.
- The company's product pipeline and a new factory should expand its addressable market and bolster supply throughout the year, the bank said.
- Watch Peloton trade live here.
Analysts Justin Post and Joanna Zhao lifted their price target for the fitness-equipment company to $175 from $150 on Tuesday, implying a 12% climb from Tuesday's close over the next 12 months. The bank maintains a "buy" rating on the shares.Where the pandemic roiled most industries, stay-at-home orders propped up demand for
The holiday-season backlog should bolster sales into the next quarter, and a new factory expected to have come online last month should alleviate some delay pressures, the team said.Read more: Morgan Stanley says to buy these 26 economically sensitive stocks poised to outperform as oil prices spike 10% by year-end
Peloton surged as much as 8.3% to an all-time high in Wednesday trading.The company's future product lineup also played into the analysts' bullish outlook. The team expects Peloton to unveil a cheaper treadmill product in the March quarter before rolling out a certified pre-owned program in the summer. A new product category is also expected to be revealed by the end of the year. The wider array of hardware should help Peloton surpass difficult year-ago comparables in 2021, according to the team. A hit to supply stands out as the biggest near-term risk for shares, they said, adding Gym reopenings and vaccine sentiments can also weigh on the stock over the next year.
Peloton traded at $156.04 as of 3:30 p.m. ET, up roughly 8% year-to-date. The company has 50 "buy" ratings, four "hold" ratings, and one "sell" rating from analysts.
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