Shares of Peloton Interactive (NASDAQ:PTON) climbed 3.6% in premarket trading, reaching $10, after UBS upgraded the stock to "neutral" from "sell" and set a price target of $10.
UBS analysts believe that Peloton's earnings before interest, taxes, depreciation, and amortization (EBITDA) will benefit from additional cost-cutting measures, particularly from lower operating expenses, which could exceed the previously announced $200 million in savings.
The firm also sees growth potential in Peloton's revenue, particularly with higher subscription pricing, which is expected to be implemented after the company's new CEO takes charge.
Meanwhile, the stock's performance has garnered mixed analyst ratings, with three out of 22 brokerages rating it "buy" or higher, 17 holding a "neutral" view, and two advising a "sell."
The median price target among analysts stands at $8, suggesting limited upside potential from its current price.
As of Thursday's close, Peloton's stock has surged roughly 66% year-to-date.