Peloton shares are down 82% from a year go and 26% so far in 2022.
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Peloton Interactive stock had a down Wednesday after an analyst with a bullish rating slashed his price target.
Baird analyst Jonathan Komp kept his Outperform rating on shares of Peloton (ticker: PTON) but dropped his price target to $40 from $70 in a note he sent to clients after Tuesday’s closing bell. He lowered his expectation for new subscribers, citing reports by CNBC and Business Insider that the company is cutting production because of waning demand.
The stock was off 1.8% to $26.06 in afternoon trading. Shares are down 82% from a year go and 26% so far in 2022. The stock took a beating last week after CNBC reported the company had planned to temporarily halt production of its interactive at-home bikes and treadmills, which connect to a $39.99-a-month subscription. In a letter to employees, CEO John Foley denied that the company was halting production, but confirmed the fitness company was adjusting its output and reviewing its cost structure.
In his note, Komp cited internal documents, dated Jan. 10, that CNBC referred to in its report on and that Business Insider published Monday.
A Peloton representative didn’t return a request from Barron’s seeking comment on the Business Insider report.
Komp argued the company could see weakness hit fiscal third quarter net added subscribers, which could potentially carry over into the fiscal fourth quarter. That could lead the firm to cut its full-year outlook, according to Komp.
Still, Komp wrote: “We still see substantially higher potential value for the subscription business assuming management can reinforce confidence in PTON’s ability to transition to a balanced/profitable growth model.”
Activist investor Blackwells Capital, which has a Peloton stake of less than 5%, sent a letter to the company’s board suggesting Foley be fired and the firm put up for sale, The Wall Street Journal reported Monday.
Write to Connor Smith at [email protected]
