What happened

Shares of Peloton (NASDAQ:PTON) shot up by more than 8% to touch a new all-time high of $169 a share on Wednesday, and was still up by 7% as of 12:30 p.m. EST. The share price gains came after the connected fitness company got a vote of confidence from a Wall Street analyst: Bank of America Securities' Justin Post boosted his price target on Peloton shares from $150 to $175 while reiterating his buy rating.

So what

Post noted that monthly visits to the company's website soared by 167% year over year in December, and also rose on a month-over-month basis. That surge suggested heightened demand for Peloton's home exercise equipment.

Man riding a Peloton Bike at home

Image source: Peloton.

Peloton continues to struggle to meet that demand, which outstrips supply by a considerable margin. As of Jan. 6, the company was still quoting delivery times of up to 10 weeks for its Bike, Bike+, and Tread+. With such a high order backlog, Peloton's "biggest near-term guidance risk remains supply," according to Post.

Now what

However, the analyst is optimistic that the consumer discretionary company's supply situation will continually improve throughout fiscal 2021, as a new factory capable of producing 1.5 million units was expected to have started production in December. Additionally, Peloton announced in December that it was acquiring Precor for $420 million, which will add a U.S. manufacturing base to the company's operations.

The Bank of America analyst also believes that products currently in Peloton's pipeline will help it boost growth further, but that the company will face some difficult year-over-year comparisons in 2021 to the astronomical growth that it enjoyed during 2020 due to the COVID-19 pandemic.