PLNT - Planet Fitness rallies after J.P. Morgan turns bullish on gym trends

J.P. Morgan upgraded Planet Fitness (NYSE:PLNT +5.6%) to an Overweight rating after having it slotted at Neutral. Analyst John Ivankoe and team pointed to positive usage trends, store growth potential, low labor/COGS exposure, and what is seen as better valuation. The firm thinks the math works out for PLNT to realize a bottom line benefit over time from its store growth. "Since late January 2021 PLNT has returned -15% versus +6% for SPX. The low-cost value proposition is the result of a labor light store model with 12- 15 employees total per gym with <5 employees required per shift. The box economics remain largely intact even after factoring for a higher initial investment cost of ~$2.5m, translating into ~17% IRR on a 10-year basis that includes a year 6 re-equipment." J.P. Morgan set a December 2023 price target of $90 on PLNT, which reflects a valuation based on its total

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Planet Fitness rallies after J.P. Morgan turns bullish on gym trends