Cowen Raises Price Target on Planet Fitness (PLNT) to $25 Following 3Q
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Cowen reiterated an Outperform rating on Planet Fitness (NYSE: PLNT), and raised the price target to $25.00 (from $24.00), following the company's 3Q earnings report. PLNT reported overall system-wide comps of +10.0%, ahead of the Street at +7.3%. About 90% of the comp was driven by an increase in members. Equipment revenues were +38.7%, driven by equipment sales to new franchise-owned store related to more new equipment sales vs. last year and also an increase in replacement equipment sales to existing franchisee-owned stores.
Analyst Oliver Chen commented, "3Q's +10% comp is impressive, given strong new member growth. PLNT's plans to upsize debt to $230mm will yield 4.6x leverage which could decline to ~3x in 4-6 Qs. We believe the addressable market continues to be incredibly large (4,000 units vs.1,242 current), as we continue to view health/ wellness as a long-term trend, & you can't work out on Amazon yet."
Shares of Planet Fitness closed at $20.32 yesterday.
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