Peloton’s still at buy at BofA Securities, as report of Apple’s rival app should have ‘limited impact’

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Shares of Peloton Interactive Inc. fell 0.7% in midday trading, after rising 2.1% on Thursday, as BofA securities analyst Justin Post reiterated his bullish stance on the at-home fitness company, as he reassured investors not to be too concerned about a Bloomberg report that Apple Inc. was planning to launch an rival fitness app. “We think Apple’s new fitness app could compete vs. Peloton’s digital only subscription offer (though we expect initial class selection and library to be inferior), but will have limited impact on Peloton’s connected fitness base that uses Peloton’s bike or a tread,” Post wrote in a note to clients. “We note that Peloton’s digital-only subscription revenue was only 1% of total revenue as of [fiscal]3Q, with the biggest value of digital subscribers being potential conversion to connected fitness subscribers.” He kept his rating at buy and his stock price target at $72, which is 10.4% above current levels. On Thursday, after the Bloomberg report came out, the stock initially fell as much as 2.9% intraday before bouncing to close up 2.1%. On Friday, the stock was up as much as 3.1% earlier in the session, before reversing course. The stock has more than doubled (up 129.7%) year to date, while the S&P 500 has tacked on 4.5%.
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