UBS has reiterated a Buy rating on Peloton Interactive (NASDAQ:PTON) and kept its price target at $11.00, according to a recent analyst note. That target represents about a 90% increase from the companys current share price of $5.80 and sits above the broader analyst consensus average price target of $9.40. Data from InvestingPro indicates Peloton is trading below its assessed Fair Value, implying room for upside if operational metrics stabilize or improve.
The UBS note emphasized churn dynamics as central to their outlook. Peloton reported a 20 basis point year-over-year improvement in Q1 churn, a result UBS says meaningfully exceeded market expectations. Managements full-year guidance calls for churn to be roughly flat year-over-year.
UBS detailed the cadence embedded in that guidance: a projected Q2 churn increase of about 80 basis points on a year-over-year basis, followed by sequential improvements of around 20 basis points in both Q3 and Q4 versus the prior year. The firm believes the current share price appears to reflect a scenario worse than flat churn for the year.
In UBSs scenario work, if churn holds flat for the fiscal year, the market-implied valuation is consistent with gross subscriber additions declining by more than 20% for the year, after an estimated 14.6% decline in fiscal 2025. UBS also noted that Peloton could see gross additions drop by more than 20% and still align with expectations for an 8% to 9% decline in total subscribers, should churn remain flat.
On the profitability front, Peloton posted a loss of $0.26 per share over the last twelve months. InvestingPro data indicates analysts expect Peloton to achieve positive earnings this fiscal year, with a consensus EPS forecast of $0.15. The companys liquidity position remains solid on a short-term basis, with a current ratio of 1.9, which UBS views as supportive as management implements its turnaround plan. Investors may also access a comprehensive Pro Research Report on Peloton among the InvestingPro coverage universe.
Corporate and operational developments have continued to unfold. Peloton announced an 11% reduction in its workforce as part of a cost-cutting initiative led by CEO Peter Stern. The layoffs mainly affect engineering roles tied to technology and enterprise projects.
On the analyst front, BofA Securities trimmed its price target on Peloton from $11 to $9 while maintaining a Buy rating. That adjustment was issued in advance of Pelotons fiscal second-quarter 2026 earnings report, which is scheduled for February 5. Separately, a Citizens analyst reiterated a Market Perform rating, noting cautious optimism that expense management could produce favorable EBITDA outcomes.
Other items of note reported by the company include a study conducted with Respin Health, which found that 84% of women experienced improvements in menopause symptoms after completing a 60-day Peloton fitness program. At Pelotons recent annual meeting, shareholders re-elected directors Karen Boone, Chris Bruzzo, and Tara Comonte and approved the companys auditor, reflecting continuity in board composition and governance oversight.
Taken together, UBSs reiteration of a Buy rating centers on a view that the stock currently discounts a downside churn scenario that may not materialize, while the companys liquidity and cost actions leave it positioned to execute a recovery plan. Market participants will be watching upcoming churn prints and the February earnings report for confirmation of the guidance cadence and subscriber trends.