(Bloomberg) -- Peloton Interactive Inc. picked up rare buy rating Monday as Bank of America Corp. upgraded the fitness company by two notches, touting its profit outlook and a positive view of its new chief executive.

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Analyst Curtis Nagle highlighted that Peloton reported fiscal first-quarter adjusted Ebitda well above Wall Street expectations last week and boosted its annual forecast for the metric to between $240 million and $290 million. He anticipates Peloton can top $300 million in adjusted Ebitda this year and $400 million over the next few years as it continues to cut costs.

“For the first time in Peloton’s history, the company is on a path of sustained Ebitda, following years of losses and cash burn,” Nagle wrote in a note to clients.

Peloton shares rose 3.6% Monday, and while the stock has climbed from a year-to-date low in August, it remains down more than 90% from a peak in January 2021.

Nagle also said Peter Stern, Peloton’s incoming chief executive officer, “ticks many boxes.” The Ford Motor Co. executive will join the company Jan. 1.

“We see Peloton’s new CEO as well suited to reinvigorate subscriber growth given subscription, hardware & health tech experience,” Nagle wrote. He also sees a large opportunity for more operating expense reductions under Stern.

While Nagle calls lackluster subscriber growth one of the bigger risks for Peloton shares, he suspects the company’s annual guidance could be conservative given it signals a deceleration through the year. Strategies around more personalized offers — and increased emphasis on the treadmill market, male users and retail distribution — could at least stabilize user tends, he said.

Nagle boosted his price target for Peloton shares to $9 from $3.75, implying a roughly 20% increase from Monday’s closing level. He’s one of just three analysts tracked by Bloomberg who recommend buying Peloton shares. The stock otherwise has 16 hold ratings and two sells, and an average analyst price target that implies more than 7% return potential over the next 12 months.

(Updates share-price moves throughout and chart.)

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