Soros Fund Ramps Up Peloton Stake, Exits JP Morgan

Soros Fund Management has disclosed its first quarter trades via an SEC filing, showing that the fund boosted its stake in home fitness stock Peloton (PTON) from 0.28M Class A shares to 2.99M shares during Q1.

The $3.1B fund, founded by billionaire George Soros back in 1969, also snapped up TransDigm (TDG) and Legg Mason (LM), as well as making a small addition to its Walt Disney (DIS) holding.

Soros’ fund exited several stocks during the first three months of the year, including (MDLZ), Keurig Dr Pepper (KDP), and JPMorgan Chase (JPM). It also reduced stakes in American International Group (AIG), Citigroup (C), ConocoPhillips (COP) and BP Plc (BP).

Peloton is now one of the fund’s biggest holdings, alongside Liberty Broadband Class C, VICI Properties (VICI), D.R. Horton (DHI), and Activision Blizzard (ATVI).

Shares in Peloton have already surged over 70% year-to-date, with an impressive 7% rally on Thursday. And looking ahead, Soros is no doubt betting that Peloton has further room to run.

Indeed, analysts also have a bullish outlook on Peloton’s potential, with a firm Strong Buy consensus. In the last three months, the stock has received 20 buy ratings vs just 1 hold and 1 sell rating. However, with share prices moving so quickly, the average analyst price target now indicates downside potential of 1%. (See Peloton stock analysis on TipRanks).

Needham’s Laura Martin bumped up her PTON price target from $40 to $50 following Peloton’s strong earning results. “COVID-19 demand is extending PTON’s lead over its competitors, which should lower its customer acquisition costs post-COVID” she explained.

She believes that while PTON’s coronavirus revenue upside is well understood, investors are under-valuing long-term cost savings from Covid-19, including near zero marketing costs in US and UK, driving positive Adj EBITDA in FY20, 2 years earlier than IPO projections.

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