Peloton shares climbed more than 9% Friday as investors realized the financial hit from the company’s treadmill recall isn’t as bad as some had feared.
Telsey Advisory Group analyst Dana Telsey had expected the recall to have a larger impact. She maintained her outperform rating on stock, but lowered her price target to $120 from $150, due to “uncertainty around the ultimate financial impact of the recalls and on Peloton’s brand name.” She noted, though, that demand for Peloton’s Bike and Bike+ machines is still solid. And the more expensive fix will be for Peloton’s Tread+ machine, rather than the less expensive Tread version, which represents a much smaller revenue stream overall, Telsey said.
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