11:10 AM EST, 12/06/2024 (MT Newswires) -- Peloton Interactive's ( PTON ) EBITDA could find support from additional cost savings as operating expenses may need to be optimized further considering "muted subscriber growth," UBS said Friday in a note.

"We believe more muted subscriber growth could necessitate further cost optimization, primarily within opex. We have further [$100 million] of opex reduction in our estimates from FY'25 levels and that number could come in higher," the investment firm said.

UBS upgraded its rating on the stock to neutral from sell and raised its price target to $10 from $2.50, citing EBITDA support from further cost cutting beyond the announced $200 million as one of the reasons.

The firm, however, tempered its outlook on the stock, saying that while subscription price may increase and drive near-term top line growth, "stock rerating could be held back by more challenging subscriber net additions, driving further opex reductions."

Shares of Peloton were up 7.5% in recent trading.

Price: 10.37, Change: +0.72, Percent Change: +7.47