Morgan Stanley downgraded Peloton to Underweight from Equal Weight on Tuesday, warning that a shift toward strength training and gyms will pressure the connected fitness company's subscriber base. Analyst Nathan Feather cut his price target to $4.50 from $5.00, implying about 16% downside, and lowered fiscal 2027 and 2028 estimates, now sitting 2% and 9% below consensus on fiscal 2028 revenue and EBITDA, respectively. Feather noted gross additions are down about 78% from their peak and connected fitness subscriber growth fell 9% year over year in fiscal 2026, citing structural headwinds such as Google search interest in strength training growing at an 8% compound annual rate and overtaking cardio, while gym membership rose to 24% from 20% in 2021. He argued consensus forecasts are too bullish, modeling a return to roughly flat subscriber growth within three years, and wrote that "cheap is not a catalyst," expecting a sub-$2,000 treadmill launch before the holidays to be only incremental.
Peloton Interactive IncDowngrade cites shift to strength training and gyms pressuring subscriber growth, with gross additions down 78% from peak.
Morgan Stanley