The Zhitong Finance App learned that UBS analyst Eric Sheridan downgraded Peloton (PTON.US)'s rating from “neutral” to “sell” and raised the target price from $115 to $124. Sheridan said that although he is still optimistic about the company's long-term prospects, the share price is more likely to fall than rise.

Peloton's stock price has more than doubled in the past six months. Despite increasing competition, investors have factored in the company's “strong product sales growth, user growth, and market leadership during public health events” in the share price, Sheridan said. At the same time, the stock price also reflects a high level of confidence that the company can report significantly better-than-expected earnings.

During the holiday season, the delivery cycle for Peloton exercise bikes increased to 4-8 weeks, while consumers needed to wait more than 10 weeks to receive high-end spinning bikes. Last December, the company said it would buy fitness supplier Preor from Amer Sports for $420 million to increase its production capacity. In response, Sheridan said the market may have overestimated the impact of the deal as it could expand Peloton's business to B2B/commercial channels such as hotels, businesses, and universities.