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Peloton earnings, ISM services — What to know in markets Tuesday

Heidi Chung

Recent IPO Peloton (PTON) is gearing up to report quarterly results Tuesday. It’s been a rough ride for Peloton since hitting the public markets in September. The home fitness brand’s shares closed below their $29 IPO price on the first day of trading and have never gotten back to that level since. Peloton stock closed at $24.99 per share on Friday. Despite the underperformance, analysts are optimistic on the future of the company.

A Peloton exercise bike is seen after the ringing of the opening bell for the company's IPO at the Nasdaq Market site in New York City, New York, U.S., September 26, 2019. REUTERS/Shannon Stapleton

“Peloton is well positioned to scale via its powerful brand, vertically integrated model and large addressable market; we forecast ramping hardware and subscriptions given geo expansion and rising awareness,” Cowen analyst John Blackledge wrote in a note Friday. Blackledge has an Outperform rating on Peloton stock with a $34 price target, which represents a 36% increase from its current trading levels.

Analysts polled by Bloomberg are expecting Peloton to report an adjusted loss of 41 cents per share on $199.35 million in revenue during its fiscal first quarter.

Economic data

On the economic data front, market watchers will get the latest Institute for Supply Management’s Non-Manufacturing Index reading for October.

“Even as the non-manufacturing sector has weathered the economic headwinds of slowing global demand and the trade dispute with China to a better degree than the manufacturing sector, the headwinds have still had a dampening impact on the sector,” Wells Fargo said in a note to clients Friday. “The headline index has declined, on average, since its late 2018 peak and currently stands at a three-year low. Encouragingly, the overall performance remains in expansionary territory, though the deteriorating trend is consistent with a meaningful slowdown in growth.”

Much like Wells Fargo, economists at Nomura expect October’s non-manufacturing sector to have held up much better than the manufacturing sector. “We continue to expect elevated business uncertainty despite the recent suspension of additional U.S. tariffs on products from China. This environment suggests downside risk remains, but we expect the non-manufacturing sector to remain more resilient to this risk compared to the manufacturing sector,” the firm said.

Other notable earnings reports scheduled for Tuesday include Chesapeake Energy (CHK), Mylan (MYL), Regeneron (REGN), Match Group (MTCH) after market close.

Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.

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