Exercise equipment maker Peloton (PTON) has struggled over the past few years. It was a pandemic darling that overbuilt and subsequently lost customers. Now, however, it is up over 5% after analysts at Bank of America (BAC) raised its outlook for the company and stock.
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Bank of America hiked its price target on PTON stock to $9, and upgraded its rating on the shares to Buy thanks in large part to Peloton’s new CEO being hire. Days ago, Peloton announced Peter Stern as its new CEO, hiring him away from Ford Motor Co. (F).
This is widely regarded as a good move as Peloton’s focus is on post-purchase services. Most folks who want a Peloton exercise machine either have one already or are waiting to buy one. With Stern at the helm, Peloton now has someone who is well-versed in post-purchase services, and can help drive Peloton’s course toward providing services and keeping customers paying into Peloton’s coffers.
New Marketing
The Stern era is already kicking off with a bang as Peloton is firing up its marketing engines to draw attention to both its hardware and its services. The new marketing campaign is called “Find your push. Find your power,” and features football-playing brothers J.J Watt and T.J Watt. The Watt brothers will be calling particular attention to their “friendly” rivalry, which in turn should attract younger males who want to emulate their sports heroes.
With two out of three Peloton members currently women, it makes sense for Peloton to court the male market, drawing in fresh customers from a previously underserved segment.
Is Peloton Stock a Buy?
Turning to Wall Street, analysts have a Hold consensus rating on PTON stock based on two Buys, 13 Holds and one Sell assigned in the last three months, as indicated by the graphic below. After a 51.69% rally in its share price over the past year, the average PTON price target of $5.19 per share implies 32.07% downside risk.
