BofA Looks Through Peloton Interactive (PTON) Margin Pressure, PT Raised to $118 After Conference Presentation
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BofA Securities analyst Justin Post raised the price target on Peloton Interactive (NASDAQ: PTON) to $118.00 (from $110.00) after Peloton’s CFO Jill Woodworth presented at BofA’s Global Technology Conference on June 8th. Peloton is leaving FY22 subscriber estimates up to the Street, and with bike trends core to FY22 sub adds, the analyst will have a better feel for FY’22 trends when June data is available.
The analyst reiterated a Neutral rating, stating "Peloton indicated that the lower-priced tread is on track to launch in F1Q, but will start with a lower gross margin profile vs bike (improving over time). Also, the company seems optimistic on opportunity to re-engage in marketing spend, but will likely see pressure on S&M margins. We think long-term investors are much more focused on sub trends (growth and churn) over HW margins as long-term driver of Peloton’s profitability".
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