Analysts Split On Peloton Shares Ahead of Earnings Release

Peloton (NASDAQ: PTON) shares are up 39% so far in 2023, and heading into its earnings release next week, analysts are split in their view of the company and stock.

On Tuesday, analysts at Baird and MKM Partners both released notes on the stock providing somewhat contrasting assessments.

Baird analyst Jonathan Komp downgraded the exercise equipment and media firm to Neutral from Outperform, cutting the price target on the stock to $12 from $14.

The analyst explained that the year-to-date strength in active lifestyle stocks has allowed him to step to the sideline on several names.

Investors are “growing more optimistic in a soft landing and strong margin-led” fiscal 2023 earnings recovery, Komp said in his research note.

However, he still believes there could be a potential future softening of consumer spending and has a more balanced near-term risk/reward view for several “lower-conviction ideas.” On Peloton specifically, Baird believes the current environment could cause Peloton to guide its March quarter below consensus and extend the time required to restore “healthy profitability.”

On the other hand, MKM Partners analyst Rohit Kulkarni is positive on Peloton heading into earnings.

Kulkarni maintained a Neutral rating and $10 price target on Peloton shares, but he believes Peloton's social media and iTunes app store tracking indicates in-line to slightly higher subscriber net adds compared to Street estimates for the December quarter.

Kulkarni said the firm has a positive bias heading into Peloton earnings.

Overall, out of 20 analysts covering Peloton, eight have a Buy rating on the stock, with eleven at Hold and one at Sell, according to TipRanks. The average price target is $12.23.