Boosting Peloton Price Target After AI-Powered Platform News
We're lifting our target price for the exercise brand as shares rebound after a tech platform announcement.
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On May 8, I gave readers a falling-wedge pattern of bullish reversal with the shares of Peloton Interactive trading at $6.40. Based on that pattern and the pivot, which I saw as the 200-day SMA at that time, I gave you a target price of $8.25. On May 16, I updated my thoughts on the position, with the breakout from the falling wedge in full swing and wrote to readers that I thought these shares could be bought at or close to their 50-day SMA.
Fast forward a little bit, and on May 27 the stock apexed at $7.80 before selling back off again. No, our target still has never been met. That said, the stock has rebounded off of its 50-day SMA on four separate occasions since that May 16 update, most recently, on Tuesday, June 3. Of course, the shares are rebounding nicely yet again. There is some news. Nothing major. Other than that, this is simple algorithmic trading and figuring out what the algos are doing is half of the game, maybe more than half of the game in 2025.
New News
On Tuesday afternoon, Peloton Interactive announced the launch of a platform that will facilitate the sale of used fitness equipment while also enabling a new revenue stream for the firm.
Peloton Repowered will be an AI-powered sales tool that will allow owners looking to sell used Peloton gear to post listings with realistic guidance on price based on age and condition. Sellers will get 70% of the sales price once a transaction is made, and the rest will be split between Peloton and Archive, which is the firm powering the platform. Sellers will also receive a $600 credit towards the purchase of new Peloton gear that will come with a discounted activation fee. The new platform is only available in the New York City, Boston and Washington, D.C. metro areas for now.
New Pattern
Our falling wedge grew a little long in the tooth in early April, and at its conclusion, an inverse head-and-shoulders pattern developed. This is also a bullish pattern, and most importantly, the neckline of the pattern takes my pivot significantly higher than it had been. With the pivot on the rise, so must the target price increase. Not my rules. I just work here. Earnings are not due until mid to late August, so there may not be new news until then. Let's take a look:
Readers will see this stretched out pattern with a neckline now running at $7.90. That's my new pivot. Readers will also see the persistent support afforded the stock at its 50-day SMA as Relative Strength improves. The daily MACD is not yet truly bullish as the histogram for the 9-day EMA is this >< close to zero and the 12-day and 26-day EMAs appear to be wrestling closely with each other for directional supremacy
Peloton Interactive (PTON)
Target Price: $9.50 (up from $8.25)
Pivot: $7.90 (neckline of pattern, up from $6.70)
Add: Right here at the 50-day SMA
Panic: Loss of 50-day SMA
At the time of publication, Guilfoyle was long PTON equity.
