Expectations for underwhelming future growth have pushed Bank of America onto the sidelines with Peloton . Analyst Justin Post downgraded the workout stock to neutral from buy and cut his price target in half to $6.50. Still, Post’s shaved target still implies an upside of 20.1% from where the shares finished Wednesday. “While we still see real value in the sub base … we have less confidence in subscriber growth drivers from here,” he said in a note to clients Wednesday. Peloton beat revenue expectations in the fiscal fourth quarter when reporting Wednesday, but it also posted a bigger-than-anticipated loss . The fitness company known for its stationary bike also guided issued underwhelming current-quarter guidance for both measures. While Post said he expected some volatility given recalls in the fourth quarter, he noted the first-quarter guidance was disappointing given Peloton’s initiatives for growth around the relaunch of its app. One bright spot in the outlook was the sold quarterly and yearly gross margin improvement expected, he noted. Still, the report pushed him to lower expectations for the 2024 fiscal year. Though he said there’s reason to believe gross additions will come, high rates of users leaving creates concern that net subscription growth will ultimately be limited. Post isn’t alone. Needham analyst Bernie McTernan similarly downgraded shares to hold from buy following the report. Peloton shares have tumbled nearly 23% so far this week. The stock has dropped almost 32% year to date. PTON 5D mountain Peloton’s last five days — CNBC’s Michael Bloom contributed to this report
