BofA downgraded Peloton to Neutral from Buy with a price target of $6.50, down from $13. The analyst cites the company’s worse than expected Q4 gross profit and below-estimated Connected Fitness Subscribers, along with the absence of FY24 free cash flow outlook. Q1 outlook was also disappointing in spite of the expected volatility around seat recall news during Q4 given Peloton’s initiatives around the app relaunch, the firm tells investors in a research note. Increase in churn would also serve as sentiment headwind for Peloton shares, BofA added.
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