Scoop up Peloton Shares on Discount, Says Analyst

Last week was a newsworthy one for Peloton (PTON). The home exercise specialist hogged the headlines after recalling not only the Tread+ but also its other treadmill, the Tread. The move Read More... The post Scoop up Peloton Shares on Discount, Says Analyst appeared first on TipRanks Financial Blog.

Scoop up Peloton Shares on Discount, Says Analyst

Last week was a newsworthy one for Peloton (). The home exercise specialist hogged the headlines after recalling not only the Tread+ but also its other treadmill, the Tread. The move amounted to a U-turn after the company previously refuted a U.S. Consumer Product Safety Commission’s (CPSC) report that claimed the Tread+ was unsafe following 39 injury incidents involving the product in addition to one child’s death.

The fact the announcement came only a day before the release of Peloton’s March quarter (F3Q210) earnings added an extra layer of spice to the announcement of the financials.

While the fallout from the saga will have to be dealt with, Peloton’s latest quarterly statement suggested the company has enough in reserves to please those taking the long-term view.

Revenue increased by 140.2% year-over-year to $1.26 billion while also handsomely beating the Street’s estimate by $140 million. EPS of -$0.03 came in ahead of the Street’s forecast by $0.10. Paid Digital Subscriptions surged by a hefty 404% to around 891,000, while Connected Fitness Subscriptions increased by 135% to over 2.08 million. Looking to FQ4, Peloton expects the treadmill recall to cost the company $165 million.

Possibly using an unfortunate turn of phrase, Canaccord analyst Michael Graham calls the quarter “full of moving parts.” However, Graham is full of praise for Peloton, and hails the company’s “impressive” business momentum and “better-than-expected profitability.” Moreover, looking at the bigger picture, the analyst thinks the recent issues could provide investors with an alluring opportunity.

“While the Tread & Tread+ recall news is causing volatility, the quality of management's response to the issue is reassuring, with appropriate reserves and extra expenses built into guidance to ensure a robust, brand-supporting response,” the 5-star analyst said. “The next two quarters take us through the initial response period for the recall and the seasonally slow summer months, and we suspect that at some point during this time period investors should have a compelling opportunity to purchase an enduring, market-defining subscription business at a discount from recent highs.”

Further down the line, from F2Q22 onwards, Graham counts “greater manufacturing capacity, meaningful marketing spend, and what should be an expanded product offering to help build leadership across cardio and strength,” as reasons to believe strong long-term growth is in the cards.

In tandem with low churn and high operating leverage, Graham believes this growth makes Peloton “an attractive growth investment vehicle.”

To this end, Graham rates PTON shares a Buy along with a $150 price target. The figure is an attractive one for investors, implying ~71% potential gains. (To watch Graham’s track record, )

Turning now to the rest of Street, where most are on the same page. The stock’s Moderate Buy consensus rating is based on 17 Buys vs. 4 Holds and 1 Sell. While not quite as exuberant as Graham’s objective, the $134.32 average price target suggests upside of ~54% in the year ahead. (See PTON stock analysis on TipRanks)

To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

The post Scoop up Peloton Shares on Discount, Says Analyst appeared first on TipRanks Financial Blog.

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How to stop debt or pension payments after someone has died

Jarnail’s son passed away recently, yet his student loan payments continue to be withdrawn. What should his next steps be? The post How to stop debt or pension payments after someone has died appeared first on MoneySense.

How to stop debt or pension payments after someone has died

Q. My son passed away a few months ago. How can I stop the bank taking out his student loan payments?
–Jarnail

A. I am so sorry for your loss, Jarnail. The difficult reality of losing a loved one is that while you are mourning, there are also financial, legal, and other administrative obligations to manage. 

Depending upon the source of the student loan, there may be no repayment requirement, and payments made after your son’s death may be owed back to his estate. 

If your son’s loan was a federal student loan, the Canada Student Financial Assistance Act states that “all obligations of a borrower in respect of a loan…terminate if the borrower dies.” The National Student Loans Service Centre (NSLSC) can be

If the loan was a provincial or territorial student loan, you can . The Master Student Financial Assistance Agreement for the province of Ontario, for example, states: “obligations…in respect of your outstanding loan balance will terminate upon your death.”

If the loan was from a bank, Jarnail, other debts of the deceased must generally be paid out of the assets remaining in their estate. Those assets could include cash, investments, real estate, personal effects or insurance. Keep in mind that not all assets become part of an estate. Assets that are held jointly or that have named beneficiaries may not form part of a person’s estate. 

It is possible for an estate to be insolvent (bankrupt) and have more debts than assets. In this case, there may be provincial legislation to decide the order of repayment for the debts. Debts of the deceased would generally not become the responsibility of their family unless it was a joint debt or there was a co-signor. 

Some debts may have life insurance associated with them that pay off the debt upon death. 

There may be other parties to contact upon someone’s death, and even payments that an estate or beneficiary is entitled to receive.

A loved one or executor should contact, if applicable:

  • Utility companies (where the deceased had services)
  • Financial institutions (where the deceased had accounts)
  • Insurance companies (where the deceased had policies)
  • Canada Revenue Agency (income tax and benefits)
  • Service Canada (Canada Pension Plan, Old Age Security, Employment Insurance benefits)
  • Provincial health insurance
  • Ministry of Transportation (driver’s license)
  • Immigration, Refugees and Citizenship Canada (passport, permanent residence card)

A deceased CPP contributor is generally entitled to a CPP Death Benefit of up to $2,500. on eligibility and how to apply. 

A survivor spouse or child may be entitled to a CPP benefit ( or ). 

A surviving spouse between age 60 and 64 may be entitled to the for low-income spouses of Guaranteed Income Supplement (GIS) recipients. 

Losing a loved one is always difficult. Some of their debts may be cancelled upon their death, while others must be paid by their estate. In either case, loved ones are often tasked with settling their estate, and that can involve paying liabilities and applying for benefits. Although these things should ideally be done relatively soon after death, if someone is mourning and there is a delay, allowances are often made for that, and payments will generally be adjusted accordingly.

Jason Heath is a fee-only, advice-only Certified Financial Planner (CFP) at Objective Financial Partners Inc. in Toronto. He does not sell any financial products whatsoever.

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