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Investing.com -- Stifel raised its rating for Planet Fitness (NYSE:PLNT) shares to Buy from Hold in a note to clients this week, raising its price target for the stock to $120 from $82.

The firm said the company has improving membership trends and untapped growth potential. 

“Recent results suggest gross joins have stabilized,” Stifel wrote, adding that multiple catalysts could sustain comparable sales growth in the mid-to-high single-digit range for the next several years.

One key driver, according to the analysts, is improved marketing. While the company has made strides in this area, Stifel believes “there is considerable runway for further improvement.” 

The firm also expects Planet Fitness to raise prices on its Black Card membership tier, estimating that such a move could provide a “3-4%-point benefit to comps.”

Stifel is also encouraged by ongoing enhancements to the Black Card Spa, which could help drive additional upgrades and retention. 

“We are encouraged by efforts to enhance the appeal of the Black Card Spa,” the note said.

Another potential tailwind is legislative. The “One, Big, Beautiful Bill” currently under consideration in the House would allow gym memberships to be eligible for Health Savings Account (HSA) reimbursement. 

Stifel noted that if passed, the bill could “potentially drive incremental membership growth.”

In light of these developments, the firm raised its comparable sales and unit growth forecasts. “We raised our comp and unit growth estimates to reflect consistent member growth and a multi-year pricing tailwind,” Stifel wrote.

The firm concluded that while Planet Fitness has shown meaningful improvement, it is “nowhere near maxed out” in its growth potential.

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