Peloton Interactive (NASDAQ:PTON) stock dipped on Tuesday as Baird highlighted adverse demand dynamics in 2023.

Equity analyst Jonathan Komp advised clients that the stock’s steep slide from 2021 was driven by both “demand pull-forward and poor execution,” factors that became more clear as the drop extended. Throughout the drop, Komp maintained a Buy-equivalent rating without fail, only now throwing in the towel on his prior Outperform rating.

“We have become more worried that incremental demand headwinds either from a more challenging economy, or from an accelerated return to in-person fitness could restrict progress on these initiatives and/or require additional cost cuts that would limit future growth potential,” he explained.

Komp cut his price target to $12 from $14 alongside the downgrade. Shares of the fitness equipment and exercise platform provider fell 2.14% in premarket trading on Tuesday.

Nonetheless, Komp maintained an optimistic outlook on the name for the long term.

“Shares look undemanding and we could revisit our positive stance if consumer demand stays strong, given our positive bias related to the brand positioning and earnings recovery potential,” he concluded.

Read more on recent executive shifts at the company.