- Peloton surged 14% on Tuesday to near record highs after it announced two new exercise products, along with a price cut to its existing connected bike.
- Peloton introduced the new Peloton Bike+, a premium version of its already popular connected bike, as well as the Peloton Tread, a budget version of its treadmill that was originally launched in 2018.
- Peloton cut the price of its Peloton bike by $350, making it more affordable for consumers who had sticker shock with the original $2,245 price tag.
- CFRA Research is cheering the move, and boosted its price target on shares to $90 from $60.
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Investors are thrilled with Peloton’s new product announcements, with shares racing as much as 14% higher to near record highs in Tuesday trades.
Peloton announced on Tuesday two new products to its line-up that now round out its product portfolio to include a premium and budget version bike, and a premium and budget version treadmill.
The new Peloton Bike+ costs $2,495 and includes a swivel monitor that allows the user to do more workouts other than cycling on the Peloton app, the ability to sync an Apple Watch with the bike for fitness tracking, and an auto-follow feature that automatically adjusts the cycling resistance during classes.
The original Peloton Bike will remain on sale for $1,895, representing a $350 decrease from its original $2,245 price tag.
The Peloton Tread+ is still the same treadmill released by Peloton in 2018, just with a new name. The Tread+ will cost $4,295.
The Peloton Tread is a new budget version of the Tread+ that will cost $2,495 and will have a slimmer profile than the Tread+. According to Peloton, the new treadmill will be available in early 2021.
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CFRA Research was impressed by the new product lineup from Peloton, according to a note published on Tuesday.
“The addition, in our view, will provide more affordable entry points to experience Peloton and address consumer concerns about sticker shock,” CFRA said.
The firm increased its price target by $30 to $90, which was a dollar below where Peloton traded at its peak on Tuesday. CFRA maintained Peloton at a “buy” rating.
Peloton is set to benefit from its “first-mover advantage in interactive fitness, which has allowed PTON to achieve critical mass and cultivate a loyal following,” CFRA concluded.
Shares of Peloton traded as high as $91.84 on Tuesday, just below their all-time high of $92.50 reached last week.