Peloton Interactive (PTON -2.27%) had a forgettable day on the stock market on Tuesday. The company's shares slipped by almost 4%, in contrast to the more or less flat performance of the S&P 500 index, on the back of a second analyst downgrade in nearly as many days.
This morning, analyst Deepak Mathivanan of Wolfe Research sliced his price target on Peloton stock to $46 per share from the previous $60. He's keeping a peer perform recommendation on the shares.
That, however, wasn't as much of a hit as the change JMP Securities prognosticator Andrew Boone made on Friday to his Peloton evaluation. In a new research note, Boone downgraded his recommendation on the stock. He now believes it is only a market perform, rather than the preceding outperform.
Boone didn't nail a price target to the stock, but did explain that Peloton's latest data indicate that demand for the company's goods and services was "significantly pulled forward during the pandemic, creating difficult [comparable figures] for this fiscal year."
During the coronavirus pandemic, Peloton has been a notable winner in the consumer discretionary sphere, as many exercise buffs eschew in-person fitness classes for the safety of in-home workouts. Analysts like Boone and many investors are concerned that the return of the former, a classic variety of guided workouts, will negatively affect Peloton's results.
Yet Boone still sounded optimistic about Peloton's offerings. In his note, he wrote that the company provides "best in class" exercise equipment and digital content. It also has notable potential for growth in new products, plus international expansion (it's still very much focused on the U.S. market).
All of these points are valid, but in the coming weeks and months, it's possible we'll see more investor defection away from stocks seen to be pandemic plays, like Peloton. This might, however, open discount buying opportunities on the shares, since the company is fundamentally sound in numerous aspects of its business.