Peloton Price Target Raised to $144 by Truist Analyst

Truist analyst Youssef Squali raised his share-price target on Peloton to a Wall Street high of $144 from $115.
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Peloton Interactive  (PTON) - Get Report shares rose Wednesday after Truist Securities analyst Youssef Squali raised his share-price target on the exercise-equipment-and-software company to a Wall Street high $144 from $115.

He has a buy rating on the stock.

"Shelter-in-place practices have created the perfect environment for greater adoption of home exercise equipment, and for Peloton (#1 sought-after brand) through a combination of high quality products/service, easy financing, greater brand awareness and a strong logistics platform," Squali wrote in a commentary cited by MarketWatch.

Peloton shares recently traded at $133.56, up 2%. They have more than quadrupled year to date amid strong demand for stay-at-home exercise products during the coronavirus pandemic.

Truist in a survey found that more than half of respondents have canceled their gym memberships or plan to do so. More than half also said that they expected to exercise more at home, even after the pandemic ends.

Bikes -- Peloton’s specialty -- are seeing their share of home exercise equipment purchases increasing, Squali said.

Last month, Peloton reported stronger-than-expected results for the quarter ended June 20. It earned 27 cents a share on a GAAP and adjusted basis, compared with a loss of $2.07 a share in the year-earlier quarter. 

Revenue more than doubled to $607.1 million from $223.3 million.

Analysts surveyed by FactSet were expecting the company to report GAAP earnings of 10 cents a share, or an adjusted 15 cents, on revenue of $586.2 million.

Gross-profit margin was 47.6%, 2.75 percentage points wider than a year earlier. Operating expenses were 33% of revenue, less than half the year-earlier figure of 67%.