What happened
Shares of exercise-at-home stock Peloton Interactive (PTON 4.95%) are racing ahead of the market Wednesday morning, rising 8.6% through 11:35 a.m. on news of an endorsement from investment bank JPMorgan.
So what
As TheFly.com reports today, JPMorgan already had an "overweight" rating hung on Peloton, so today's news doesn't involve an actual upgrade or a change in sentiment. Rather, JP is stepping up to support Peloton stock after other analysts cut bait when bad press over injuries (and one death) connected to use of Peloton's treadmills sparked a recall of the equipment earlier this month.
After quizzing Peloton CFO Jill Woodworth on the controversy, JP reports that the company has fixed the manufacturing issues that led to the recall and that demand remains strong for the Tread+ product despite the bad PR. JP further praises Peloton for its decision, announced earlier this week, to build its first U.S. factory (in Ohio) to help address concerns about product supply and delays in fulfilling orders.
Image source: Getty Images.
Now what
But it's worth pointing out that Rome wasn't built in a day -- and neither is a bike and treadmill factory. Although construction of and spending on the $400 million investment will begin this summer, production of new bikes and treadmills isn't expected to begin before 2023.
