Roth boosts Peloton target to $66, says buy Mirror acquisition selloff

Roth Capital analyst George Kelly raised the firm’s price target on Peloton Interactive (PTON) to $66 from $51 and keeps a Buy rating on the shares. While Lululemon Athletica’s (LULU) acquisition of Mirror “raises the competitive bar,” shares of Peloton (PTON) should be bought on any weakness, Kelly tells investors in a research note. Peloton in premarket trading is down 1% to $56.50. The acquisition of Mirror will bring even more attention to the at-home fitness space from large fitness, apparel, private equity and tech companies, says Kelly. Most major at-home fitness equipment companies have raised capital or been acquired over the past several years, and Peloton “may eventually follow the same route,” he adds. Kelly estimates that Mirror has approximately 75,000 subscribers compared to Peloton’s 1M. Further, the analyst sees a “huge” market since there are 70M gym subscribers in the U.S. Kelly believes Peloton’s continued momentum is not reflected in consensus estimates and that the stock’s valuation has “room to run.”