UPDATE: Stifel Downgrades Peloton Interactive (PTON) to Hold
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Stifel analyst Scott Devitt downgraded Peloton Interactive (NASDAQ: PTON) from Buy to Hold with a price target of $14.00 (from $45.00).
The analyst comments "We are lowering our rating to Hold. While we acknowledge that it is still early in the company's transition, visibility into the normalized growth rate of the business has yet to emerge. Guidance for 2Q calls for just ~18K net sequential Connected Fitness Subscriber additions, despite the company having lowered prices on its core hardware products in April. The price reductions implemented early in F4Q will contribute to reductions in hardware gross margins, leading to an adj. EBITDA outlook well below our expectations and consensus. We expect it will take several quarters to determine a more normalized pace of connected fitness subscriber growth, and we are materially lowering our estimates as we take a wait and see approach to initiatives aimed at reinvigorating growth and reducing costs. Our PT moves to $14 following our model changes."
Shares of Peloton Interactive closed at $12.90 yesterday.
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