Peloton's Price Target Is Raised on Strong Holiday Sales, 2020 Outlook

Analysts are bullish on Peloton's holiday sales and 2020 outlook.
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Peloton Interactive (PTON) - Get Report may have gotten the last laugh with its controversial Christmas commercial after analysts at Raymond James raised the stock's price target based on channel checks that showed strong holiday sales.

Analysts at Raymond James raised their price target to $36 from $32 while analysts at J.P. Morgan lifted their target price to $38 from $34.

Raymond James and J.P. Morgan have outperform and overweight ratings on the stock, respectively.

While Raymond James looked back at the company’s previous performance, analysts at J.P. Morgan looked forward to a promising 2020 for Peloton.

“We believe Peloton is well positioned to disrupt the fitness industry through its at-home connected fitness subscription platform, with significant runway for growth as the company’s current SAM is only ~5% penetrated,” analyst Doug Anmuth wrote.

The firm listed Peloton Interactive as “one of our best ideas in 2020,” putting the home fitness machine maker in the same category as Facebook (FB) - Get Report, Amazon.com (AMZN) - Get Report, Lyft (LYFT) - Get Report and Snap (SNAP) - Get Report.

The firm said it sees Peloton’s upside being fueled by international markets, marketing of 0% financing, improved profitability and the potential for a lower-priced machine launch before the 2020 holiday season.

“We believe Peloton has a compelling financial profile, including multiple growth levers that should support 35%+ top-line growth through FY24 (i.e. expanded product portfolio & international market launches), and strong unit economics that give us confidence in Peloton’s ability to achieve significant profitability over time,” Anmuth said.

Peloton shares traded basically flat Wednesday, slipping 0.25% to $31.30.