By Sam Boughedda
Peloton (NASDAQ:PTON) was defended at Citi on Monday with analysts stating that extended holiday promotions suggest improving subscriber demand.
Peloton has struggled since the end of the pandemic, with demand dwindling and the company having to previously halt production in some areas and reduce prices significantly. As a result, Peloton's share price plunged from highs of over $160 per share to its current price of just over $12.50.
The analysts, who reiterated a Buy rating and $18 per share price target on the stock, explained in their note that "following Peloton's extended holiday promotions from November to January that resulted in improving FY2Q23 traffic trends—visits to onepeloton.com rose 42% M/M in Nov., declined slightly (-5%) M/M in Dec., and are +28% M/M through 01/25."
"We are raising our CF Subscriber projections for FY2Q23 and going forward. Underlying greater subscriber growth, in our view, are Peloton's revamped product set and go-to-market strategy with its FaaS bike rental option, recently launched CPO program, and newer distribution partners Amazon (NASDAQ:AMZN) and Dick’s (NYSE:DKS) that we believe are attracting greater demand to the service," Citi argues.
Citi believes that with Peloton's organizational changes largely complete, the focus now turns to execution.