Citi lowers Peloton target but says ‘green shoots are emerging’

Citi analyst Ronald Josey lowered the firm’s price target on Peloton to $8 from $10 and keeps a Buy rating on the shares. Although Peloton’s fiscal Q2 results were mixed, with its subscriber base of 3M-plus stabilizing and churn improving, the business is experiencing improving fundamentals, the analyst tells investors in a research note. The firm acknowledges the concerns around limited revenue visibility as management now expects to deliver positive free cash flow in Q4, but it also notes Peloton’s expanding gross margins and improving results across newer sales channels and products. “Some green shoots are emerging,” says Citi.