UBS analyst Arpine Kocharyan reiterated a Neutral rating and $7.50 price target on Peloton Interactive (NASDAQ: PTON).

The analyst comments "Currently most of product sourcing for Peloton comes from Taiwan and China, with more meaningful exposure to Taiwan, given in July 2022 PTON exited all of its owned manufacturing operations, expanding relationship with third party Taiwanese manufacturer of hardware Rexon Industrial Corp. Given new round of reciprocal tariffs, U.S. is imposing 32% tariff on Taiwan, but we note that given that Peloton was already subject to aluminum tariffs known before this past week, Peloton's hardware might be possibly exempt from reciprocal tariffs. The notice specifically lists previously proposed actions that will not be subject to reciprocal tariffs, including "articles subject to 50 USC 1702(b) and steel/aluminum articles and auto's/auto pars already subject to Section 232 tariffs." We are learning more about the situation and this, of course, could change but for now we believe newly announced reciprocal tariffs have immaterial impact on PTON. Recall that PTON has indicated previously that assuming all of the tariffs imposed on Canada and Mexico were to go through, PTON could see less than 1% impact on connected fitness product COGS, mostly related to apparel and Precor. In terms of 10% tariff on China, unmitigated impact on PTON is less than 1% increase in COGS. So we estimate reciprocal tariffs on China that are incremental news this week are still immaterial to PTON's story, as it relates to COGS impact only. We emphasize though that this remains a fluid situation, and our for-now-no-impact commentary is only addressing the COGS side of things, before any mitigating factors, though we note that the full economic impact is harder to assess in case of a recession and higher inflation, as connected fitness industry remains discretionary."

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Shares of Peloton Interactive closed at $5.00 yesterday.