In a report released today, Michael Nedelcovych from TD Cowen maintained a Buy rating on Planet Fitness, with a price target of $125.00.
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Michael Nedelcovych has given his Buy rating due to a combination of factors that suggest a positive outlook for Planet Fitness. The increasing adoption of GLP-1 drugs is seen as a potential tailwind for the fitness industry, as these drugs may encourage healthier lifestyles, leading more people to seek gym memberships to counteract muscle loss associated with the medication. Surveys indicate that a significant portion of people expect to maintain or increase their physical activity, with a notable percentage already holding or planning to acquire gym memberships.
Furthermore, there is a growing emphasis on health and wellness post-pandemic, particularly among younger demographics who are increasingly focused on fitness. This trend is expected to drive higher gym membership rates, benefiting companies like Planet Fitness. Although the immediate impact on Planet Fitness may be modest, the company’s management is actively working on strategies to enhance franchise economics and expand their presence, positioning them well for future growth.
In another report released on June 23, RBC Capital also maintained a Buy rating on the stock with a $110.00 price target.