Peloton shares surged over 12% in morning trading.
Morgan Stanley started off coverage Peloton Interactive with an Equal Weight rating. The firm took the stance that Pelotonwill remain the clear leader in connected fitness based off its industry-leading content and low churn rate, although a lack of visibility and conviction in the company's medium-term outlook kept it cautious with the rating.
Analyst Lauren Schenk's breakdown: "We introduce a proprietary toolkit to frame the wide range of potential outcomes across five key inputs: churn, bike unit sales, bike price, new modality unit sales, and subscription price. We lean bullish, with 50% upside to our price target, but lack near-term visibility."
Schenk and team plan to wait for more details around new CEO Barry McCarthy's go-forward strategy before issuing an Overweight rating.
Morgan Stanley assigned a price target of $32 to Peloton Interactive(NASDAQ:PTON)vs. the 52-week range of $20.44 to $129.70.
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