Cowen Raises PT on Peloton (PTON) to $175 as it Expects 'Strong Results' This Week

Cowen analyst John Blackledge has reiterated an "Outperform" rating on Peloton (NASDAQ: PTON) and raised the price target to $175.00 per share from the old $130.00.

PTON is due to report its John Blackledge F2Q earnings on 2/4 after the market closes, and Blackedge argues that the ongoing COVID-related demand and seasonally strong holiday period is likely to yield strong quarterly numbers from the company.

“Peloton shares are +15% since the F1Q21 print on 11/5, as Connected Fitness subs and engagement ramp, further helped by ongoing demand surge amid the pandemic (current Bike delivery time in US is approx 8-10 weeks), alongside opex efficiencies. We continue to view Peloton's valuation as attractive at current levels, supported by large TAM and opportunity ahead, which is further underscored by the COVID-19 "at-home" trend. PTON currently trades at a slight premium on EV/Sales compared to tech/growth/social & digital subscription peers, justified in our view given higher growth forecast,” Blackledge wrote in today’s note.

Looking forward, the connected fitness platform looks “well-positioned” to prosper amid rising awareness, a surge in the demand for home fitness, as well as favorable health and wellness trends.

“Our Cowen proprietary survey data suggests younger demos are less likely to have heard of PTON (see chart below), even as these age groups spend more on fitness. We view these age trends as an opportunity given PTON's fastest growing customer cohorts are <35 years old with HH Income <$75K. In addition, awareness has remained elevated (vs. '19 levels) even as Peloton restricted marketing spend during the pandemic, underscoring PTON's positive word-of-mouth.”

Overall, the analyst sees PTON as a “clear leader in the emerging connected fitness segment and is poised to expand its addressable market as awareness rises amid its expansion into new hardware & content verticals and international markets.”

Peloton stock price closed at $146.13 last week, or 8.53% in the red.

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