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Investing.com -- Deutsche Bank upgraded Peloton Interactive (NASDAQ:PTON) to “Buy” from “Hold' saying the stock has been overly punished, shrugging off concerns around tariffs and consumer spending.
It expects shares to outperform over the next year as the company’s earnings growth holds up better than feared.
Though there are tariff-related cost pressures from Peloton’s Taiwan-based hardware supply chain and headwinds to new customer additions, analysts at Deutsche Bank (ETR:DBKGn) said recent market reaction, over 30% share price drop since the company’s fiscal Q2 results, has been excessive.
PTON shares have traded more in line with pressured retail and e-commerce peers, analysts wrote, pointing to names like Arhaus, Lululemon (NASDAQ:LULU), Wayfair (NYSE:W), and Nike (NYSE:NKE).
Deutsche Bank cut its 2026 revenue and adjusted EBITDA estimates by 2% and 3.5%, respectively, and lowered its price target to $6.60 from $7.00.
But even under downside scenarios, FY26 EBITDA reductions were capped at 8%, suggesting a more stable outlook than the stock’s recent selloff implies.
Analysts believe defensibility of Peloton’s earnings growth algorithm will emerge over the next 12 months, even in a challenged macro backdrop, the note said.
The analysts based their new target on a 10x multiple of adjusted EBITDA, reflecting a balanced view of growth potential and execution risk.
Despite the near-term pressures, Deutsche Bank expects Peloton to show relative strength as investors reassess the durability of its subscription-led business model.
