BofA attributes Peloton weakness to HSA provisions not making Senate bill

BofA analyst Curtis Nagle notes Peloton (PTON) shares are trading down 10%, which the firm attributes to health savings account provisions from the House Reconciliation Bill not being included in the current Senate Bill, which is relevant to Peloton as the HSA provisions included provisions from the PHIT Act that would have allowed pre-tax spend under a HSA to be used for fitness equipment, including Peloton hardware and subscriptions. While the news of the of the HSA provision removal is “disappointing and potentially removes a new driver of connected subscriber growth,” the firm still sees “plenty” of catalysts not priced in shares and says the news does not fundamentally change its thesis on Peloton. BofA maintain its Buy rating and $9.50 price target on Peloton shares.