Morgan Stanley 'Overweight' on Planet Fitness stock, sees buy on weakness

EditorEmilio Ghigini
Published 03/20/2024, 06:17 AM
© Reuters.

On Wednesday, Morgan Stanley reiterated its Overweight rating on Planet Fitness (NYSE:PLNT) stock with a steady price target of $79.00. The fitness chain, listed on the New York Stock Exchange under the ticker NYSE:PLNT, has been advised by the firm as a favorable buy on weakness, suggesting confidence in the stock's potential despite short-term market fluctuations.

The firm's position is based on a valuation analysis that, even under a theoretical downside scenario, sees the current stock price as undervalued. According to the analysis, Planet Fitness is trading at approximately 15 times its enterprise value to EBITDA (earnings before interest, taxes, depreciation, and amortization), which is notably lower than its historical average. This valuation is just a notch above some of the more challenged quick-service restaurant franchises that trade around 14 times.

The analyst's comments highlight that while the short-term impacts on business results and market sentiment are not to be underestimated, the valuation presents an attractive entry point for investors. The firm's stance is that the current market price does not reflect the company's true value, indicating a potential upside for the stock.

Investors and market watchers will be keeping an eye on Planet Fitness's stock performance, as the company navigates the market environment and works to meet the expectations set by this target valuation.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.