Truist upgrades Peloton stock amid signs of recovery

In the United States, Peloton has recently shown signs of recovery after several challenging years. Analysts from Truist, in a note published on April 28, 2025, stated that the fitness equipment company is nearing a point where improved fundamentals might support a gradual equity recovery. After more than three years of being downgraded from Buy to Hold, the stock has been upgraded to Buy with a price target of $11 per share, indicating a potential upside of nearly 75% from its previous closing price of $6.29. Peloton, once a highly favored stock during the pandemic, is now in a phase of significant restructuring. Its earlier growth spurred by increased demand during lockdowns was coupled with excessive spending, leading the company to face challenging market conditions as consumer demand dwindled. This led to CEO changes and layoffs, alongside efforts to stabilize the company’s finances amid cash flow issues. Recent performance indicators from Peloton indicated a turnaround, with better-than-expected quarterly results reported in October 2024 and February 2025. Analysts expect that Peloton is inching closer to profitability, with the forecast for revenue growth to return in fiscal 2026. By significantly reducing operating expenses and enhancing free cash flow profitability, the new leadership is believed to be focusing on sustainable revenue increases for future growth. The overall sentiment surrounding Peloton stock has recently improved, contributing to more than a 5% increase in premarket trading this morning. With these changes and a more optimistic outlook from analysts like Youssef Squali, investors are starting to see potential value in Peloton once again, as evidenced by the stock's performance over recent days.