Investing.com – Planet Fitness (NYSE:PLNT) stock jumped 3% Tuesday as Morgan Stanley (NYSE:MS) initiated coverage of the fitness value segment leader while calling it a “compelling growth story."
The brokerage put an overweight rating on the stock with a target of $93, about 22% higher from its current level of $76.
According to analyst Brian Harbour, the market is skeptical of a return to normalized membership and unit growth but there’s evidence that in-person fitness can recover.
He believes Planet Fitness’ scale puts it in a good position to grow and grab market share.
Planet Fitness has 95% of its units under the franchise model.
Value fitness clubs are more suburban and less work-driven which means customer overlap with higher-end at-home fitness companies like Peloton (NASDAQ:PTON) and Beachbody (NYSE:BODY) isn't that significant, as per Harbour.