Exercise equipment maker Peloton (PTON) has had its ups and downs over the last few years. It was a pandemic darling that overbuilt and discovered the down side of a pandemic darling. Now, however, it is up over 5% after analysts at Bank of America gave it the boost of a lifetime.
Bank of America hiked its price target on Peloton to $9, and upgraded the stock to Buy from its previous rating, thanks in large part to Peloton’s new CEO hire. Peloton, just days ago, hired away Peter Stern, who served as one of the leaders of post-purchase services at Ford (F). Stern was a major part of Ford Blue and Ford Pro, which were very profitable operations for Ford as a whole.
This was widely regarded as a good move, as Peloton’s focus these days is on post-purchase services. Most folks who want a Peloton exercise machine either have one already or are waiting to buy one on the brisk used market. With Stern at the helm, Peloton now has someone who is well-versed in post-purchase services, and can help drive Peloton’s course toward providing services and keeping customers paying into Peloton’s coffers.
New Marketing Up
And the Stern era is already kicking off with a bang, reports note, as Peloton is already firing up its marketing engines to draw attention to both its hardware and its services. The new campaign is called “Find your push. Find your power.,” and features football-playing brothers J.J and T.J Watt. The Watt brothers will be calling particular attention to their “friendly” rivalry, reports note, which in turn should attract younger males who want to emulate their sports heroes.
With two out of three Peloton members currently women—remember that odd Christmas gift ad Peloton did a while back?—it makes particular sense for Peloton to court the male market a little harder now, drawing in fresh customers from a previously underserved segment.
Is Peloton Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Hold consensus rating on PTON stock based on two Buys, 13 Holds and one Sell assigned in the past three months, as indicated by the graphic below. After a 51.69% rally in its share price over the past year, the average PTON price target of $5.19 per share implies 32.07% downside risk.
