KeyBanc analyst Edward Yruma reiterated an Overweight rating and $185.00 price target on Peloton Interactive (NASDAQ: PTON) noting that the CPSC recall of Tread and Tread+ has led to an immediate pause in sales of both products and has postponed the launch of Tread in the U.S.. However, issues with Tread may be more easily remediated than initially anticipated.

The analyst stated "Tread’s issues involve how the tablet is attached to the Tread, management has line of sight to potential fixes, and most importantly, it does not have the same safety issues as Tread+. PTON is also working to build additional safety features for the Tread+, including a digital passcode, but developing physical hardware to enhance the safety of the product may take multiple quarters. PTON estimates the revenue impact of the Tread and Tread+ recall will be ~$165 million. Finally, PTON continues to build and stockpile Tread for its upcoming launch."

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Shares of Peloton Interactive closed at $83.78 yesterday.