PLNT - Planet Fitness started at Buy as RBC eyes attractive entry point

2023-05-19 09:35:27 ET

RBC Capital Markets initiated bullish coverage of Planet Fitness ( NYSE: PLNT ) on Friday, highlighting an attractive entry point for investors at present.

Equity analyst Christopher Carril highlighted factors he believes will be able to drive strong comparable store sales and membership growth across the summer season, including promotions targeted at younger consumers and higher-tier options with attractive perks for existing members. A larger store footprint and the opportunity to “recover equipment sales and grow this revenue stream over time” bolster the bull case, according to Carril.

“We see PLNT’s highly-franchised model delivering strong ongoing earnings growth in a ‘normalized’ post-pandemic environment (e.g. 20+% EPS growth post-2023). We expect this to be driven in-part by sustained +HSD% same-store sales growth, with our view supported by compelling marketing (e.g. High School Summer Pass), as well as our work with our data science team,” he wrote. “New store growth will remain a key point of debate near-term, but we believe the recent pullback presents an attractive entry point for PLNT shares.”

More on Planet Fitness:

• Planet Fitness: Weak Near-Term Outlook But Positive On Long-Term

• Investing In Planet Fitness: Wise Move Or Foolish Gamble?

• Read more breakdowns on Planet Fitness from Seeking Alpha analysts

• View the growth metrics

• See the financial and valuation comparisons to sector peers

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