Jefferies Calls Planet Fitness the ‘Walmart of Gyms’; Shares Rise

What you need to know

• Jefferies analysts boosted their price target on Planet Fitness, calling the gym operator the "Walmart of Gyms," alluding to the chain's large size and low prices.
• The analysts made Planet Fitness their Top Pick for 2025 in the fitness & wellness sector, and maintained a "buy" rating on the stock.
• Jefferies says that Planet Fitness benefits from the healthy lifestyle trends as well as higher membership fees.

Jefferies analysts called Planet Fitness (PLNT), the world’s largest fitness center, a “best-in-class” facility. “Walmart of Gyms,” The company’s low membership fees and large size are seen as a benefit to Americans who want to get healthier.

Jefferies made Planet Fitness its Top Pick for 2025 in the fitness & wellness sector, and raised the firm’s price target to $150 from $130. It kept a “buy” Rating on the Stock

In a Tuesday note, analysts wrote to their clients that “healthy living trends and shifts toward affordability drive membership tailwinds,” Additionally, recent price hikes at Planet Fitness are increasing same-store sales.

'High Margins and Robust Cash Flow' Highlighted by Jefferies

Analysts said the franchise model of the company was a good one “ensures high margins and robust cash flow,” As the internal rate of return increases, franchisees expand more units.

In their November meeting, the two also mentioned that Colleen, who was appointed as CEO in June, had been a disappointment to them. “laser-focused, increasing our confidence.” Keating was also mentioned. “a well-articulated strategy to refine brand positioning, improve the member experience, put the customer at the center, and partner with franchisees.”

The shares of Planet Fitness increased by 2.1% in the most recent trading on Tuesday. They were valued at $101. The stock is up nearly 40% since the start of 2024, outpacing the S&P 500 over the period.

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