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Planet Fitness upgraded to Overweight on usage trends at JPMorgan
JPMorgan analyst John Ivankoe upgraded Planet Fitness to Overweight from Neutral with a $90 price target post the Q1 results. The company's low-cost value proposition is the result of a "labor light" store model with 12-15 employees total per gym with less than five employees required per shift, Ivankoe tells investors in a research note. The analyst says the box economics remain largely intact even after factoring for a higher initial investment cost of $2.5M, translating into a 17% rate of return on a 10-year basis. Planet's growth algorithm is intact, supported by improving usage trends and solid franchisee economics, writes Ivankoe.