Planet Fitness ASR news ‘strengthens investment case,’ says Morgan Stanley

Morgan Stanley analyst Megan Alexander notes Planet Fitness made several announcements over the last few days – including $280M accelerated share repurchase agreement, or ASR, as part its $500M share repurchase authorization, the board’s authorization of a new share repurchase program of up to $500M to replace the existing program, and the completion of its refinancing transaction – as well as giving updated expectations for 2024 guidance as a result of the debt financing and ASR. The updated guidance implies the intention of the ASR is solely to offset dilution from the refinancing and therefore suggests minimal changes to estimates, but the reiteration of EPS guidance de-risks Q2 earnings and the mechanics of the announced transactions indicate management and the board’s confidence in the trajectory of the business, says the analyst, who keeps an Overweight rating and $79 price target on Planet Fitness shares.