BofA Securities has lowered its price target for Peloton Interactive (NASDAQ:PTON) to $9.00 from $11.00, while maintaining a Buy rating on the stock. Peloton shares are trading at $5.73, well below both BofA's revised target and the analyst high target of $20, according to InvestingPro data.
The note arrives in advance of Peloton's fiscal second-quarter 2026 earnings report, scheduled for February 5. BofA highlighted that the company implemented price increases across products and subscriptions on October 1, 2025, a move that will factor into near-term revenue dynamics.
Despite the price increases, BofA flagged heightened promotional activity over the holiday season. The firm expects an elevated monthly connected fitness churn rate of about 1.9 percent, compared with churn of 1.6 percent in fiscal 2026 first quarter and 1.4 percent in fiscal 2025 second quarter.
For the fiscal second quarter of 2026, BofA projects total revenue of $676.0 million and EBITDA of $72.2 million, figures the firm describes as broadly in line with consensus. BofA's model forecasts connected subscriptions of 2,662,000, marginally above the Street estimate of 2,659,000.
Looking further ahead, BofA's outlook for fiscal third quarter 2026 anticipates churn to ease, supported by seasonally stronger gross additions and New Year promotions running through mid-January. For that quarter the firm forecasts revenue of $637.0 million and EBITDA of $115.4 million.
Peloton's shares have experienced recent volatility, falling nearly 22 percent over the past six months. InvestingPro analysis shows that analysts still expect the company to reach profitability this fiscal year, with an EPS forecast of $0.15.
Other market commentary and company developments were noted alongside the BofA update.
- Citizens' analyst reiterated a Market Perform rating and expressed cautious optimism about Peloton's expense management, which could produce favorable EBITDA outcomes.
- A joint study by Peloton and Respin Health reported that 84 percent of women in a 60-day fitness program said their menopause symptoms improved, suggesting potential health benefits tied to the company’s offerings.
- At Peloton's 2025 Annual Meeting of Stockholders, three directors were re-elected: Karen Boone, Chris Bruzzo, and Tara Comonte, each receiving substantial shareholder support.
- A Bloomberg report cited slow initial sales for Peloton's new AI-powered exercise equipment, though the report also noted that interest in the product line has increased foot traffic at retail partners.
- UBS maintained its Buy rating with a price target of $11.00 and observed a modest 0.2 percent year-over-year increase in Peloton web traffic in October.
Collectively, these points sketch a picture of a company balancing price changes, promotional pressures, and product-level interest as it moves toward its upcoming earnings release. BofA's updated target reflects those tensions while retaining a positive recommendation on the shares.
Contextual note on estimates and market posture
BofA's estimates, including the slightly higher connected subscription figure than consensus and the sequential improvement in expected EBITDA in Q3, suggest the firm anticipates operational leverage if churn normalizes and promotional activity subsides. At the same time, the near-term pressure from holiday discounting and slower product uptake in some channels informs the reduced valuation target.
Investors will likely focus on Peloton's reported revenue, subscription trends, churn metrics, and commentary on product demand and promotional cadence when the company releases its fiscal Q2 results on February 5.