Peloton (NASDAQ:PTON) stock is on the move Thursday after Bank of America analyst Curtis Nagle weighed in on the fitness company.
The bad news for PTON stock starts with the Bank of America analyst dropping shares from a “neutral” rating to an “underperform” rating. To put that in perspective, the analyst consensus rating for PTON is a hold based on 27 opinions.
To go along with that downgrade, Nagle also cut the firm’s price target for PTON stock to $4.15 per share. That’s a potential downside of 13.5% compared to the stock’s prior closing price on Wednesday. It’s also well below the analyst consensus price prediction of $10.49 per share.
What’s Behind the PTON Stock Downgrade?
The Bank of America analyst is looking to falling class data as a reason for the downgrade of PTON stock. Here’s what Nagle said in a note to clients obtained by Seeking Alpha:
“In our view, this has been a contributor to higher churn in 2023 and note a -90% correlation between the two metrics since fiscal 3Q21. We see increased churn risk in 2024 from this dynamic as the number of members reaching the average subscriber lifetime increases 2.6x from 2023 using a 60-month average lifetime.”
PTON stock is down 1.7% as of Thursday morning with some 4.1 million shares traded. For comparison, the company’s daily average trading volume is about 11.3 million shares.
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On the date of publication, William White did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
