Peloton's Bullish Analysts Fail to Generate Needed Excitement

Companies and Brands

Published: October 21, 2019 1:25 pm

Last Updated: January 6, 2020 1:51 am

Peloton Interactive Inc. (NASDAQ: PTON) proved to be another disappointing initial public offering in the unicorn category. While the company had delayed the IPO ahead of time, Peloton also has seen more legal activity around usage of music and its bottom line was not really improving with top-line growth.

Peloton was set to price in a range of $26 to $29 per share, and it was a 40 million share offering that at $29 was deemed too high. On the first day, the shares dropped, and it has yet to trade at the formal IPO price. Now that the quiet period has ended for the underwriting firms, the early gains on positive coverage have faded and the shares were down lower.

When the underwriting syndicate firms are finally free to begin coverage after an IPO, whether the reaction is favorable or poor, it is sometimes viewed as an opportunity for the firms to reset expectations or to drive upside interest ahead.

24/7 Wall St. has tracked multiple firms issuing positive analyst ratings now that the quiet period has ended. The calls have yet to create much excitement around the reports.

Merrill Lynch started coverage as Buy with a $29 price objective.

Oppenheimer started Peloton with an Outperform rating and a $29 target.

SunTrust Robinson Humphrey started it with a Buy rating and a $30 target price.

Needham started it with a Buy rating and a $30 target price.

UBS also assigned a new Buy rating and $30 target.

Evercore ISI started it as Outperform with a $30 target price.

KeyBanc started it as Overweight with a $32 target price.

Barclays started it as Overweight with a $32 target price.

JPMorgan started coverage as Overweight with a $32 target price as well.

Raymond James started it as Outperform with a $32 target.

Canaccord Genuity started Peloton as Buy with a $33 target.

JMP Securities started coverage at Buy with a $33 target.

Cowen started it as Outperform with a $34 target.

Stifel started it as Buy with a $35 target price.

Goldman Sachs started it as Buy with a $37 target price.

Some firms that were not underwriters issued new coverage on Peloton prior to the quiet period ending:

MKM Partners had only a Neutral rating and a mere $24 target price.
Robert W. Baird started it as Outperform with a $28 target price.

Peloton closed down 1.4% at $23.52 ahead of the calls, and despite opening up at $23.99 for a small gain, the shares were last seen down 3.8% at $22.60 in midday trading on Monday. The stock has a post-IPO range of $21.14 to $27.98.

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