Peloton Interactive Likely to Raise Subscription Fees in 2026, Morgan Stanley Says

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Yesterday

Peloton Interactive (PTON) will likely raise its Connected Fitness subscription fee by $5 per month in its fiscal Q3 2026, potentially driving additional revenue and earnings before interest, taxes, depreciation, and amortization, Morgan Stanley said in a note Monday.

"Over the past quarter, the debate on [Peloton Interactive] has largely centered on the likelihood, magnitude, and timing of a price increase," the brokerage said.

The price increase, which will likely be implemented beginning Jan. 1, 2026, could contribute an additional $146 million of annualized revenue and about $130 million of EBITDA, assuming 90% incremental margins and about 100 basis points of subscriber churn, Morgan Stanley said.

The brokerage said it now expects fiscal 2026 EBITDA of $417 million, 16% above consensus, but raised concerns that a price increase might make it difficult for Peloton to grow the number of subscribers, impacting expansion plans.

Morgan Stanley raised its price target to $5.75 from $4.00, while reiterating an equal-weight rating on the stock.

Price: 6.69, Change: +0.09, Percent Change: +1.36

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