Peloton Interactive (PTON) - Get Report shares have run up but still have potential, according to a JP Morgan analyst, who raised his price target for the connected-fitness company to a Wall Street high of $105 from $58.
Shares of the New York company at last check climbed 6.5% to $89.09.
Analyst Doug Anmuth, who affirms an overweight rating on Peloton, said in a note to clients that even as the shares have nearly tripled in 2020 to date, he continues to like the stock as the earnings report approaches.
He sees "significant upside potential" to analysts' consensus earnings estimates, both near and long term.
The company is scheduled to report fiscal-fourth-quarter results on Sept. 10 after the market closes.
Anmuth said that Peloton's biggest near-term challenge is keeping up with elevated demand, with bike order-to-delivery times of around seven weeks on average, according to channel checks.
This is happening even though Peloton doubled its manufacturing pace since March, the analyst said, and management's prior expectation of more normalized delivery times by July or August.
The coronavirus pandemic forced gyms to close and people have had to exercise at home.
While the delay is not optimal, Anmuth said it bodes well for ongoing demand and sustained sales strength.
Last week, Goldman Sachs analyst Heath Terry raised the firm's price target on Peloton to $96 from $84 a share, while maintaining a buy rating.
The investment firm said that consensus estimates for the New York company's growth and profitability in the near and long term were too low.