Why This Peloton Interactive Analyst Is Bullish On The Market For Row

Peloton Interactive Inc (NASDAQ: PTON) has finally launched its rowing machine, Peloton Row, which has been in development since 2019, and will be immediately available for pre-order in the U.S., with deliveries likely commencing in December, according to BofA Securities. It's the latest in a set of initiatives the company is taking to regain momentum.

The Peloton Interactive Analyst: Justin Post reaffirmed a Buy rating for Peloton Interactive, while keeping the price target unchanged at $19.

The Peloton Interactive Thesis: Peloton Row will be available at a starting price of $3,195, Post said in a note.

He's among a majority of analysts who are bullish on the stock, as Benzinga data shows a consensus Buy rating on PTON.

“Peloton is targeting the high end of the rowing market given capabilities and price point, and Peloton is probably unwilling to take a gross margin loss on the units given likely material sales overlap with existing Peloton subscribers,” the analyst wrote.

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“If we assume Peloton can penetrate 10% of 12mn U.S. rowers and a 50% rower/bike/tread overlap, we estimate 600k incremental subscriber opportunity long-term,” Post mentioned. “We also see opportunity for upside from potential international expansion and that some non-rowers may become interested in rowing,” he added.

“We expect modest Peloton Row contribution to FY23 subs,” the analyst further stated.

PTON Price Action: Shares of Peloton Interactive had declined by 1.24% to $9.53 at the time of publication Wednesday.