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Courtesy Peloton
Peloton Interactive
stock rose Friday after a bullish endorsement from KeyBanc Capital Markets. KeyBanc says the at-home workout company has created catalysts for long-term growth—well beyond the Covid-19 crisis that has given it such a boost this year.
Analyst Edward Yruma reiterated an Overweight rating and $160 price target on Peloton (ticker: PTON). He writes that investors are underestimating the company’s ability to differentiate itself competitively thanks to “highly compelling proprietary programming.”
He highlights the company’s stable of fitness personalities and key collaborations with celebrities, as well as its savvy use of social media. Competitors, like
Lululemon Athletica’s
(LULU) Mirror, Varilis, and Nautilus are platforms in which instructors are secondary to the company’s device, he argues. That gives Peloton’s talent reasons to stay loyal to the company.
Yruma is upbeat about the growing opportunity for its Pilates classes, and says Peloton’s partnerships with artists could make it a “compelling music discovery platform” going forward.
With Covid cases on the rise, and potentially more restrictions and closures for gyms around the country, demand should continue to remain robust. That leads him to raise his earnings-per-share estimates through the rest of the fiscal year.
Peloton is up 1% to $138.15 in recent trading.
The shares have soared more than 385% in 2020, as the pandemic led to a surge in demand for at-home fitness and long wait times for its bikes. Naturally, attention has turned to whether or not the company can maintain its momentum once Covid-19 is no longer a threat—a question that has dogged pandemic winners across sectors.
That said, Yruma is far from the only Peloton bull, with plenty of others arguing that it will keep winning post-pandemic.
Write to Teresa Rivas at [email protected]
