Planet Fitness (PLNT) – Get Report flexed its muscles Tuesday after Morgan Stanley initiated coverage of the fitness-center operator with an overweight rating and a $93 price target.
Shares of the Hampton, N.H., company at last check were 5.2% higher at $77.57.
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Analyst Brian Harbour said in a research note that he saw evidence that in-person fitness can recover. The analyst said Planet Fitness's scale positions the company to rekindle growth and take market share, according to the Fly.
Harbour said that in-person fitness has quickly bounced back in areas that have fewer virus restrictions.
The analyst said he expected this to continue as people return to work and school.
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Harbour noted that nearly a quarter of gyms closed during the pandemic, which gives large firms like Planet Fitness an advantage.
Gym closures resulted in a spike in demand for interactive fitness equipment maker Peloton Interactive (PTON) – Get Report, which said on Tuesday that a new version of its treadmill would be available in the U.S., Canada and the U.K. at the end of the month.
Earlier this month, Planet Fitness posted second-quarter earnings that missed Wall Street's expectations.
The company earned 21 cents a share, missing the Zacks consensus estimate of 22 cents. The latest figure compared with a loss of 32 cents a share a year earlier.
Revenue totaled $137.3 million, more than triple (up 241%) the year-earlier level when many health clubs in the country were temporarily closed due to COVID-19.
Planet Fitness Chief Executive Chris Rondeau said during a call with analysts that the company regained about 75% of the members it had lost from its peak in first quarter 2020 to the low in the fourth quarter of that year.