Rumors of a potential sale of Peloton Interactive, Inc. (NASDAQ:PTON) have been flying thick and fast following reports of fundamental issues at the at-home fitness brand.
While Amazon, Inc. (NASDAQ:AMZN) and Nike, Inc. (NYSE:NKE) are being talked of as potential suitors, an analyst at Wedbush said Apple, Inc. (NASDAQ:APPL) could also join the race for Peloton.
The Apple Analyst: Daniel Ives has an Outperform rating and $200 price target for Apple shares.
The Apple Takeaways: Peloton stock is down over 80% from pandemic highs amid growth concerns, the gradual winding down of work-from-home and some execution issues, analyst Ives said in a note.
A handful of technology and consumer brand stalwarts could be keen on bidding for the company, and activist investors are also pushing for a sale, the analyst noted.
"We would be shocked if Apple is not aggressively involved in this potential deal process," Ives said.
The analyst sees a potential Peloton acquisition as a major strategic coup for Apple, catalyzing its aggressive health and fitness initiatives over the coming years.
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"With ~2.8 million paid subscriptions today and a very strong/unique competitive moat, Apple acquiring Peloton would be both an offensive and defensive acquisition in our opinion," the analyst said.
Cross-selling other consumer services into the Peloton ecosystem would make a ton of strategic sense for the likes of Walt Disney Company (NYSE:DIS), Nike, Amazon or Apple, Ives said. The prospects of another stalwart getting their hands on Peloton, the analyst said, would be a business model risk for Apple's health care segment and future endeavors.
"On the offensive front, Apple through its Fitness + subscription service and Apple Watch strategy would be able to leverage the Peloton services and flywheel to significantly bulk up its health care initiatives, which have been a key strategic linchpin for Cook," Ives said.
Peloton would likely be an acquisition in the $12 billion to $15 billion range depending on the timing and competitive process, the analyst estimates.
AAPL Price Action: At last check, Apple shares were trading near-flat at $172.50.
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