Evercore ISI analyst Warren Cheng added shares of Planet Fitness (NYSE:) to Tactical Outperform List ahead of the company’s earnings report that is due tomorrow.

Cheng likes PLNT stock from a tactical standpoint, mostly because of the ability “to potentially benefit from an inflation trade-down” as well as a pivot to the “Experiences-from-Things trade” that Cheng believes will gain even more steam over the summer.

Moreover, the analyst says PLNT is likely to deliver a “significant” Q1 sales and earnings beat tomorrow amid the “sharp recovery in member joins in February/March.”

“Our view is based on our channel checks and recent conversations, the acceleration in other ‘COVID-loser’ activities in 1Q (Booking.com gross bookings, Live Nation tickets sold, and TSA check-ins, hotel RevPAR, Tripadvisor monthly unique users), and the recent surge in our EVRISI limousine and airlines company surveys,” Cheng said in a client note.

Analysts expect Q1 sales to reach 205 millions and EPS to be $0.31, compared with $190 million consensus and $0.27 respectively.

Premarket prices are down almost 1% for PLNT stocks today.

By Senad Karaahmetovic