Goldman Sachs upgrades Peloton on turnaround potential

Investing.com -- Goldman Sachs upgraded Peloton (NASDAQ: PTON) to Buy from Neutral and raised its price target to $11.50 from $7, saying the company’s new strategy could put it on a path to revenue and cash flow growth over the next 12 to 18 months.

The brokerage cited several shifts in Peloton’s business, including a move beyond fitness into broader wellness offerings, and an effort to personalize the user experience through potential coaching features.

While specifics are limited, Goldman said the focus on new product experiences and distribution—such as micro-stores, travel partnerships, and expansion into education and international markets—could help widen Peloton’s reach.

The firm also noted improvements in hardware growth and margins, better monetization of the subscriber base, and tighter control of operating costs in the company’s fourth-quarter results.

Management forecast over $200 million in free cash flow for fiscal 2026, which Goldman said points to ongoing progress in stabilizing the business.

Looking ahead, Goldman said it sees scope for Peloton to return to revenue growth by mid-FY26, with potential for that to accelerate. It also flagged long-term benefits from expanding into wellness trends and offering app-based services to users without Peloton hardware.

The upgrade reflects a view that new leadership and clearer execution on the updated strategy could restore investor confidence and drive a positive revision cycle in earnings and margins.

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