Morgan Stanley Just Downgraded Peloton Stock. Here's Why.

Peloton Interactive (PTON) stock is slipping today after senior Morgan Stanley analyst Nathan Feather downgraded the connected fitness company to “Underweight.” In his research note, Feather also lowered his price target on PTON to $4.50, indicating potential downside of another 10% from current levels. 

The bearish call is particularly significant given Peloton shares have already been a disappointment for investors in 2026, currently down nearly 20% versus the start of this year. 

Morgan Stanley’s Bearish View on Peloton Stock

Feather’s thesis centers on the structural decline in Peloton’s user base, noting that gross customer additions have plummeted an alarming 78% from their pandemic peak.

More importantly, subscriber growth will remain in negative territory, at -9% year-on-year in fiscal 2026, with prolonged weakness extending through fiscal 2029, he told clients. 

Because recurring subscription fees represent the vast majority of PTON’s profit margin, persistent subscriber churn threatens the company’s overall earnings durability.

Crucially, Barchart itself has a “40% SELL” opinion on Peloton stock as well, indicating technical momentum also favors continued downside ahead. 

What Else Could Hurt PTON Shares?

According to the Morgan Stanley expert, PTON stock is unattractive also because of a secular shift, in which consumers are increasingly choosing brick-and-mortar gyms over home equipment. About 24% of the U.S. population is now an active gym member — a notable increase from roughly 20% just five years ago. 

Additionally, Google search data shows interest in strength training has grown at an 8% compound annualized rate over the past decade, officially surpassing cardio search volume for the first time.

This behavioral pivot poses a major threat to Peloton, given that its hardware revenue relies on demand for home cardio equipment like indoor cycles and treadmills.

What’s the Consensus Rating on Peloton?

Investors should note, however, that other Wall Street analysts do not agree with Feather’s bearish view on Peloton. 

The consensus rating on PTON shares remains at “Moderate Buy,” with the mean price objective of $8.25 indicating potential upside of more than 60% from current levels. 

On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.