Retail giant Costco Wholesale (COST) is partnering with fitness equipment maker Peloton Interactive (PTON) to sell stationary bikes during the year-end holidays.
Costco stores and its website will sell the internet-connected fitness bike of Peloton known as the “Bike+.” The Peloton bike will be sold in 300 Costco stores for $1,999 each, and on Costco’s website for $2,199 between November 1, 2024 and February 15, 2025.
The Bike+ is being sold at Costco at a discount. The exercise bike that is connected to the internet and can run pre-recorded exercise classes typically sells for about $2,500 each. The two companies said they hope to reach younger and more affluent consumers with the Bike+.
Peloton Under Pressure
The deal gives Costco a new product to sell during the holidays. The warehouse club is constantly branching out to sell new products to its members, from gold bars to baby clothing. For Peloton, placing its fitness bikes with Costco comes at a time of extreme pressure for the company.
Peloton is currently being run by two board members after its former CEO, Barry McCarthy, resigned earlier this year. After thriving during the COVID-19 pandemic, Peloton has struggled with slowing sales in recent years and turned its focus to achieving profitability.
Peloton said it hopes to grow its relationship with Costco over time. So far this year, COST stock has risen 35%. In contrast, PTON stock has declined 12% year-to-date.
Is COST Stock a Buy?
Costco stock has a consensus Moderate Buy rating among 25 Wall Street analysts. That rating is based on 17 Buy and eight Hold recommendations made in the last three months. There are no Sell ratings on the stock. The average COST price target of $948.18 implies 6.90% upside potential from current levels.
