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Peloton Stock Surges 17% After UBS Upgrade and Price Target Boost to $11.
ByAinvest
Wednesday, Jul 30, 2025 1:55 pm ET1min read
Peloton Interactive (PTON) stock surged 17% after UBS Group upgraded it to Buy from neutral and raised its price target to $11. UBS expects revenue growth driven by price increases and improving user trends. The company is expected to pursue an 11-12% price hike for its monthly connected fitness subscriptions, which could drive $90 million in new revenue. The consensus rating is Moderate Buy with an average price target of $8.50.
Peloton Interactive (PTON) stock surged by 17% on Wednesday following UBS Group's upgrade from a neutral rating to a buy recommendation. The Swiss investment bank also raised its price target for the fitness company to $11 from $7.50 [2].UBS analysts believe that Peloton's efforts to cut costs and improve operational efficiencies will drive stronger-than-expected earnings by next year. The brokerage estimates that Peloton could guide fiscal 2026 EBITDA to between $400 million and $450 million, well above the current Street forecast of $358 million [3].
A key factor in UBS's positive outlook is Peloton's planned 11-12% price increase for its monthly connected fitness subscriptions. The brokerage estimates that this price hike could drive $90 million to $100 million in new annualized revenue [2].
Peloton is also expected to benefit from improving user trends. UBS notes that active users have shown signs of returning to growth in May and June, and interactive visits have stabilized after earlier declines [3]. Additionally, the company is anticipated to announce new products later this year, which could help slow subscriber declines.
Despite the positive outlook, Peloton shares remain far below their pandemic-era peak. The stock has gained around 30% so far in 2025 but is still down 19.3% year-to-date [2].
UBS estimates that Peloton's valuation, currently trading at an estimated 6–7 times 2026 EBITDA, is undemanding given early signs of a turnaround in cash flow and profitability [3]. The consensus rating for Peloton is a moderate buy with an average price target of $8.50 [2].
References:
[1] https://www.barrons.com/articles/peloton-stock-analyst-predicts-price-hikes-f9ca06e1
[2] https://www.tradingview.com/news/reuters.com,2025:newsml_L4N3TR1QP:0-ubs-upgrades-peloton-to-buy-rating-shares-rise/
[3] https://finance.yahoo.com/news/ubs-upgrades-peloton-cost-cuts-154410716.html
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