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While Goldman Sachs is neutral on Peloton shares, KeyBanc Capital Markets analyst Edward Yruma raised his price target for the shares in anticipation of imminent bullish price moves.
The shares of Peloton Interactive Inc (NASDAQ: PTON) is taking a big bearish dive after an analyst from Goldman Sachs Group Inc (NYSE: GS) revised his position on the stock. The analyst Heath Terry revised Peloton Interactive’s shares to neutral from the previous buy rating and attributed this to the overvalue of the stock since it was included in the “Americas Buy List” back in October 2019.
According to Bloomberg, Peloton Interactive’s shares have surged by 458% since it made the Buy List last year and Terry noted that “much of the near term opportunity is priced in.” The shares closed 5.78% lower on Wednesday and plunged further by up to 5.2% in pre-market trading. Peloton’s shares are now currently priced at US$120.25 in the pre-market and at the time of writing.
The COVID-19 lockdowns brought about a surge in the demand for Peloton’s exercise equipment as people reinvented ways to stay fit in the advent of remote work. Now Goldman Sachs is suggesting that the COVID-19 factor which initially contributed to boosting the overall shares’ valuation of Peloton may now work against the company as shipping concerns mounts. The COVID-19 cases continue to rise in the United States where Peloton’s major customers abound and Terry also pointed out that the company’s earnings this quarter due to the congestions at Los Angeles Port that is hampering product deliveries.
While Goldman Sachs is neutral on Peloton shares, KeyCorp’s KeyBanc Capital Markets analyst Edward Yruma raised his price target for the shares in anticipation of imminent bullish price moves. As reported by the Motley Fool, Yruma’s new price target for Peloton is about 27% higher than the current price of the stock and pegged at $160 per share. With various analysts profiling stocks based on different fundamentals, Peloton’s near term surge may depend a lot on how the company handles its apparent delivery challenges.
Peloton Shares Have More Forces to Contend With
The interactive exercise service may be a premier service for Peloton but and the launch of similar services by America’s heavyweight tech firms may give Peloton an unwelcome rivalry. Coinspeaker reported the drop in Peloton’s shares in Mid-September after Apple Inc (NASDAQ: AAPL) launched a fitness subscription service dubbed Apple Fitness+. The Apple version is reportedly cheaper than Peloton’s offerings and serves as a bigger force to contend with.
The battle to maintain a positive share outlook as observed has a lot of underlying work to be done both in terms of managing operational logistics as well as in keeping competitors at bay. For a company who has enjoyed increased patronage in the past months, the onus lies on the firm to maintain its offerings and products that are proven to attract customers while churning out more products to maintain its lead just as it did last month when reports broke out that the company was set to launch New Bikes and Cheaper Treadmills to meet customer’s demands