Why Peloton Shares Are Bouncing Back Today

Peloton Interactive Inc PTON is trading higher Friday, bouncing back after the stock plunged yesterday on reports the company planned to temporarily halt production of some of its products as a result of waning consumer demand.

Peloton CEO John Foley responded in a note to the Peloton team Thursday night.

"Rumors that we are halting all production of bikes and Treads are false," Foley said. However, he acknowledged that the company plans on "right-sizing" its production. "We are resetting our production levels for sustainable growth," Foley added.

Peloton also released preliminary fiscal second-quarter 2022 results on Thursday.

The connected fitness company narrowed its revenue guidance from a range of $1.1 billion to $1.2 billion to about $1.14 billion versus the estimate of $1.15 billion.

Peloton improved expectations for an adjusted EBITDA loss of $350 million to $325 million to a loss of $270 million to $260 million.

Analyst Assessment: Multiple analyst firms cut price targets on the stock Friday, but all targets remain above the current share price.

• Telsey Advisory Group analyst Dana Telsey maintained Peloton with an Outperform rating and lowered the price target from $70 to $30.
• Needham analyst Bernie McTernan maintained Peloton with a Buy rating and lowered the price target from $105 to $50.
• Stifel analyst Scott Devitt upgraded Peloton from a Hold rating to a Buy rating and lowered the price target from $56 to $40.
• Deutsche Bank analyst Chris Woronka maintained Peloton with a Buy rating and lowered the price target from $76 to $42.

See Also: Why Netflix Shares Are Diving Today

PTON Price Action: Peloton has traded as low as $23.25 and as high as $166.57 over a 52-week period.

The stock is up 9.13% at $26.45 at time of publication.

Photo: courtesy of Peloton.