On Tuesday, Xponential Fitness (NYSE: XPOF) closed the session 1% lower despite initially jumping on the back of Citi, starting the stock with a Buy rating.
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Even so, Xponential Fitness, which owns fitness such as CycleBarr, Rumble, and Pure Barre, is up 7.23% in 2022, continuing to benefit from strong demand.
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Citi analyst James Hardiman initiated coverage of the stock, assigning it a $29 price target, telling investors in a research note that the company has “carved out a defensible and profitable position” as the industry leader in the boutique fitness space.
In addition, Hardiman stated that Xponential's asset-light franchise model allows it to quickly scale the business, with recurring revenues “buffering the downside in the event of a recession.”
XPOF is viewed positively on Wall Street according to TipRanks, with seven out of seven analysts rating the stock a Buy. The average price target is $29.71, representing around a 34% upside.
Master Franchise Agreement in Japan
Elsewhere, the company signed a master franchise agreement in Japan for Rumble and its AKT brands with Wellness X Asia, the company's existing Master Franchise Partner in Japan for Club Pilates and CycleBar.
“The Japanese market is ready for world-class boutique fitness options like Rumble and AKT, and we are excited to ramp up our growth in this strategically important market,” commented Chief International Development Officer of Xponential Fitness, John Kersh.
“Naoki and the Wellness X Asia team have done an outstanding job developing Club Pilates in Japan, and we are confident they will have equal success with Rumble, AKT and CycleBar.”
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