What happened
One stock that has struggled mightily to reach the highs it touched in the thick of the coronavirus pandemic is Peloton Interactive (PTON 5.27%). The latest headwind buffeting the company was a bearish note from an analyst on Thursday, which helped drive the beleaguered company's share price down by more than 7% on the day.
So what
The analyst donning the bear suit was Evercore ISI's Shweta Khajuria, who feels that the current data points for Peloton are "largely negative."
Image source: Peloton Interactive.
Khajuria noted that there has been a rise in comfort levels of consumers returning to physical gyms lately. During the coronavirus, many were either closed for business entirely or suffering from low turnout on fears that COVID-19 could spread easily in such environments. This greatly benefited Peloton as it provides home-based exercise hardware and video streaming services.
As for the present, Khajuria wrote that "We view these rising comfort levels for physical gyms as a growing headwind for [Peloton], ahead of a full reopening as consumers reconsider returning to gyms and going out to malls/movies/restaurants."
Now what
If realized, this trend certainly will compound Peloton's recent struggles. Yet despite her less-than-positive prognosis, Khajuria is maintaining her in-line (read: neutral) recommendation on the company's stock, at a $42 per-share price target:
We continue to believe that [Peloton] shares may well be range-bound in the near-to-mid-term as we think [Peloton] will likely face diminishing consumer demand (due to rising competition, higher equipment prices, reopening economies, lower marketing spend in seasonally slower months, and mix-shift in consumer spend toward experiences).
