Peloton stock gains after Bank of America predicts ‘big holiday’ season

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Peloton Interactive Inc. continues to face extended backlogs with its exercise bikes when compared to pre-pandemic times, according to Bank of America analyst Justin Post, and he said that bodes well for the company’s demand trends. Post upped his price objective on Peloton’s stock to $150 from $116, with the new target being higher than all those listed on FactSet. Post predicts that Peloton is “set up for a big holiday” as COVID-19 cases are increasing in the U.S. and Europe heading into the winter, which tends to be a strong period for Peloton sales even in normal times. He’s encouraged about the potential for Peloton’s new offerings, including a lower-priced treadmill. “Research from Peloton’s [total addressable market] survey suggests the tread market is 2-3x as big as bike market, so we believe lower-priced tread launch could attract a much larger audience for Peloton products,” he wrote. Peloton shares are up 1% in Thursday morning trading and they’ve gained 110% over the past three months as the S&P 500 has risen 7%.
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