Peloton Interactive is scratched off Evercore ISI’s Tactical Underperform List

Evercore ISI removed Peloton Interactive (NASDAQ:PTON) from its Tactical Underperform List on Monday just ahead of the company’s FQ4 earnings report scheduled for August 23. The action means the firm no longer has Peloton (PTON) singled out as a candidate for a near-term sharp share price loss.

Analyst Shweta Khajuria thinks Peloton’s connected fitness subscriber guidance of 3.08M to 3.09M is beatable based on intra-quarter data points and model sensitivity analysis. That consensus estimate on Wall Street is at 3.09M. However, Evercore believes there is downside risk to the Street’s FQ4 gross margin estimate of 42%, due to the elevated costs related to bike recall. “We also see modest downside risk to FY’24 net adds against a tough macro environment, although we will likely not get FY’23 guide,” noted Khajuria.

Evercore ISI has an In Line rating on Peloton Interactive (PTON) and a base case price target of $10.00.

Earnings watch: Peloton Interactive (PTON) is forecast to report revenue of $642.3M and EPS of -$0.37. PTON has not reported a quarterly profit since the December 2021 quarter. Options trading implies a double-digit swing in share price after PTON reports. The stock fell 14% after its last earnings report.

Shares of Peloton Interactive (PTON) gained 0.88% in premarket action on Monday after moving up 1.59% on Friday. The exercise equipment and services stock still trades 20% below its 200-day moving average.