Peloton Interactive, Inc. (PTON) shares rose about 4% during Thursday's session after Goldman Sachs reiterated its Buy rating and raised its price target to a Street high of $96.00 per share. Analyst Heath Terry cited channel checks showing net additions for the quarter, suggesting that the quarter could be well in front of consensus expectations.
- Peloton shares soared after Goldman Sachs raised its price target to a Street-high $96.00 per share during Thursday's session.
- Most analysts are bullish on Peloton stock going into earnings, but at least one analyst has questioned its high valuation.
- Peloton's stock could see a near-term bullish moving average convergence divergence (MACD) crossover in the near term, while the relative strength index (RSI) remains near neutral levels.
Goldman Sachs, KeyBanc, and many other analysts have been bullish on Peloton throughout the COVID-19 pandemic, which has shut down gyms across the country and brought exercise back into the home. However, UBS believes that the stock price already accounts for these tailwinds, creating a lot of pressure to match those expectations. Peloton's stock has soared more than 130% percent since January.
A channel check is a method of independent stock analysis whereby company information is supplied by examining the company's distribution channels. Clients of the subject company are interviewed to see whether their purchases of the subject company's product or service have remained stable, increased, or decreased.
From a technical standpoint, Peloton stock moved sharply higher during Thursday's session toward its all-time highs. The RSI remains in neutral territory with a reading of 59.55, but the MACD could see a near-term bullish crossover. These indicators suggest that the stock has more room to run.
Traders should watch for a breakout from the stock's previous highs to fresh highs over the coming sessions. If the stock fails to break out, traders could see a move lower to test trendline support or the 50-day moving average at $63.50. If the stock breaks out higher, traders should watch for a move toward trendline resistance at around $77.50 over the intermediate term.
The Bottom Line
Peloton Interactive shares moved sharply higher after Goldman Sachs raised its price target to a Street high of $96.00 per share. While most analysts are bullish on upcoming earnings, some believe that the stock's valuation already accounts for the economic tailwinds.
The author holds no position in the stock(s) mentioned except through passively managed index funds.