Goldman Sachs is turning bullish on Peloton after the company’s financial results soothed many investor worries. Analyst Eric Sheridan upgraded the connected fitness company to buy from neutral and lifted his 12-month price target to $11.50, which suggests more than 61% potential upside. His previous price target was $7 per share. “In total, we see PTON as a story with new [management], new initiatives aimed at platform growth and monetization for the next few years and a scope for higher incremental returns on capital in the form of free cash flow conversion,” Sheridan said in a note to clients, adding that further details from the company on these strategies could propel investor confidence over the next 12 to 18 months. Sheridan’s upgrade comes after Peloton on Thursday exceeded Wall Street’s top and bottom line expectations , posting a surprise profit for its fiscal fourth quarter that greatly topped analysts’ forecasts. The company also announced another cost-cutting plan to save $100 million in expenses, half of which it said will be derived from laying off 6% of staff. Shares of Peloton jumped nearly 5% in premarket trading Friday. The stock is recovering from a rough year, with shares down 18.3% year to date as sales and paid subscribers have fallen since the pandemic-era rush. PTON 1Y mountain Peloton stock over the past year. Sheridan said he sees potential for Peloton to return to total revenue growth in the middle of fiscal year 2026, which could then compound in the middle of the year and set the company in a “solid revision cycle.” His optimism on shares also comes from Peloton’s work on its cost base and capital structure, as well as its greater use cases and go-to market strategies of its fitness products.
