Peloton Stock Jumps After Bernstein Bull Note

There's plenty of room for a shift in sentiment toward Peloton stock

Deputy Editor
Mar 15, 2022 at 9:50 AM
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Peloton Interactive Inc (NASDAQ:PTON) stock is back in the spotlight today, last seen up 5.1% to trade at $21.23 after Bernstein initiated coverage on the fitness equipment maker's shares with an "outperform" rating. The firm, which also hit PTON with a $40 price target, noted the health of the company's underlying business, confidence in new management, and attractive entry point following it slide on the charts over the last few months.

Specifically, Peloton stock suffered a massive pullback in early November, resulting in a bear gap that sent the shares below $55 for the first time since June 2020. And things only got worse from there, with the 70-day moving average rejecting PTON's early February rally attempt and sending shares back to the $20 region for the first time since the broader market's pandemic-related pullback in March 2020. Year-to-date, the stock is off 43.5%.

Circling back to analyst sentiment, the brokerage bunch is split on PTON, with nine of 19 rating it a "hold" or worse, coming into today. Meanwhile, the 12-month consensus target price of $43.41 is a staggering 103.2% premium to last night's close. This leaves plenty of room for additional upgrade/price-target hikes to roll in.
Short sellers were heading for the exits ahead of today's news, falling 14.3% in the most recent reporting period. Yet the 37.77 million shares sold short make up 12.7% of the stock's available float, making Peloton stock a prime candidate for a short squeeze. 

Meanwhile, the options pits lean firmly bearish. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), PTON sports a 50-day put/call volume ratio of 1.48, which stands in the 96th percentile of annual readings. This means puts have been getting picked up at a much quicker-than-usual clip during the past 10 weeks. 

It's also worth noting the equity's Schaeffer's Volatility Scorecard (SVS) sits at 81 out of 100. This suggests the stock has exceeded options traders' volatility expectations during the past year.


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