Why One Analyst Is Racing Ahead With a Street-High Target for Peloton

Peloton Interactive Inc. (NASDAQ: PTON) has been off to the races since mid-March, with shares more than quadrupling since then. If anything, analysts have been chasing this exercise bike maker for months. However, one analyst now has taken the lead with a brand new street-high price target. Now it’s Peloton’s turn to see if it can keep up.

JPMorgan’s Doug Anmuth reiterated an Overweight rating and raised the price target from $58 to $105, which implies upside of 25.6% from the most recent closing price of $83.67. Anmuth noted that he continues to like the stock ahead of earnings.

Prior to this, Goldman Sachs had the highest target on Wall Street at $96.

Anmuth was quick to say that he sees significant upside potential for Peloton in both the near term and long term. However, he noted that the biggest near-term challenge for the firm is keeping up with the increased demand.

Note that bike order-to-delivery times are roughly seven weeks on average. The supply chain squeeze is still happening despite Peloton doubling its manufacturing pace since March. Management expected these delivery times to normalize by July or August.

Although this delay is not considered optimal for the company, it’s not a bad problem to have when your products are in high demand. All this increased demand is the result of the COVID-19 crisis closing gyms and forcing people to work out at home. Also, the current pandemic climate bodes well for the ongoing demand and sustained sales strength.

Be on the lookout for Peloton’s fiscal fourth-quarter results, due on September 10. Analysts are calling for earnings of $0.09 per share and $574.58 million in revenue.

Peloton stock traded up over 3% to $86.60 on Wednesday, in a 52-week range of $17.70 to $92.50. The consensus price target is $63.83.

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