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Author: Alan LittleDate: 2021-08-24

Peloton (PTON) -2% as Oppenheimer warns of full-year guidance miss

Fitness equipment company Peloton (PTON) fell in trading on Monday after Oppenheimer cut its price target and said that its upcoming Q2 report could underwhelm investors.

Peloton (PTON) shares were down 2% on Monday after Oppenheimer said that the fitness equipment company is likely to miss consensus expectations for full-year earnings when it posts its next update this week.

While Peloton was one of the ‘winners’ during the pandemic as consumers embraced stay-at-home fitness products, analysts are unsure of its position amid the reopening of gyms and a return to normality.

Oppenheimer analyst Jason Helfstein noted on Monday that third-party data is showing that growth slowed for both subscriptions to its fitness service and general product deliveries over the summer.

Peloton was forced to recall its Tread+ treadmills earlier in the year due to safety issues, and it appears that its momentum could be stalling, at least in raw numbers.

There are some positives though, according to Helfstein, as Peloton has built a compelling product that stacks up well compared to others in the sector.

He said: “We believe Peloton is redefining fitness, based on its convenience and relative value vs. other premium offerings.”

Helfstein expects connected fitness subscriptions to at least match the consensus for Q2, but believes that delays to the Tread relaunch could hit FY 2022 guidance.

While Helfstein reiterated an outperform rating for the New York-based enterprise, he did shave $10 off a new $140 price target.

MKM Partners struck a more optimistic tone in its update last Friday.

Analyst Rohit Kulkarni said that there are a number of positive developments for bulls to focus on, including its expansion into Australia and acquisition of Precor for $420m.

Kulkarni stood pat on a buy rating and added $20 to a new, higher $130 price target.

Peloton is set to disclose its report on Thursday (26th August), and its shares were lower on Monday, sliding 1.40% to $106.56 on the Nasdaq.

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