• The shares of Planet Fitness (NYSE: PLNT) have received a $130 price target from Evercore. These are the details.

The shares of Planet Fitness (NYSE: PLNT) have received a $130 price target from Evercore. And Evercore analyst Warren Cheng initiated coverage on Planet Fitness with an “Outperform” rating.

“While it is pretty well accepted that there was a significant upwards ‘COVID Demand Re-rate’ for almost all health & wellness categories, the market isn’t giving the same credit to gyms. We think Planet Fitness’ demand is still 15% depressed (back at pre-pandemic levels… but still way below trend), and see a 25% upside to 2023 EPS estimates as gym demand fully normalizes by 2023. In this report, we go through a detailed analysis of underlying member growth (i.e., where membership would go if COVID were to go to zero tomorrow),” wrote Cheng in a research note. “We conclude that ~2.0-2.5 million members are likely sitting on the sidelines… and ready to fuel a period of elevated joins over the next 12-18 months as gym demand (likely one of the last behaviors to recover) fully normalizes. We also take a closer look at just how far we have still to go in the powerful HVLP consolidation of the gym industry, taking into account demographic data, market share shifts (a lot happened during COVID).”

Cheng noted that valuation is a key debate for the company. And Cheng pointed out that Planet Fitness already trades at a premium to the restaurant franchisor group.

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