Highlights in small-caps: Peloton and Spotify deal, M&A in pharma, small-caps ETF results

Peloton's workouts will appear on the Spotify streaming service app. Indian pharma company Sun Pharma will buy women's health products maker Organon, and Italy's Chiesi will buy KalVista, a developer of therapies for a rare disease. The leaders among small-cap ETFs in the first quarter were funds that benefited from the conflict in the Middle East and the resulting energy shock. Read about the main events of the small-caps sector from Ma. 27 to Ma. 1 in our review.

Analyst Aldiyar Anuarbekov examined which small-cap ETFs benefited from the energy shock in the first quarter.

The Oninvest sample included 38 small capitalization ETFs. The leader was the First Trust Small Cap Value AlphaDEX ETF with a yield of 8.6%. It is noteworthy that eight of the fund's ten largest positions are energy. The largest position in the leader's portfolio is Kosmos Energy, an oil and gas company with assets in Africa and the Gulf of Mexico, whose shares rose following the jump in oil prices.

Among international small-caps ETFs, the leader was the Avantis International Small Cap Value ETF: its portfolio is dominated by financials (25%), consumer discretionary (18%) and energy (20%) - these were the segments that grew on the back of the oil rally.

Peloton Interactive, a small-cap seller of fitness equipment, has entered into a partnership with the Spotify streaming service. Now the content about fitness and healthy lifestyle will be available to Spotify Premium subscribers in most countries where the service is present. Against the backdrop of the deal, Peloton quotes added 2.5% on April 27 - to the maximum since early February.

However, Motley Fool freelance analyst Neil Patel believes buying the company's securities is risky. Peloton is trying to overcome a sales slump after the coronavirus pandemic ended. Patel points out that Peloton expects a 3% decline in revenue in fiscal 2026. Peloton's stock has lost 11.5% of its value since the beginning of the year. Now 10 Wall Street analysts recommend buying them, 11 recommend holding the stock and only one recommends selling.

Mid-cap producer of products for women's health Organon announced that it will be bought by a major player of the Indian pharmaceutical market - Sun Pharma. The offered price - at the rate of $14 per share - is 103% higher than the value of Organon securities before the information about possible purchase appeared in mass media. The market reacted positively to the announcement of the deal: at the trading on April 27, the share price soared by about 17% in the moment, up to the maximum mark for a year.

After the merger, Sun Pharma, with total revenues of $12.4 billion, will become one of the top 25 global pharmaceutical companies. The deal was preceded by a corporate scandal at Organon. In October 2025, the company dismissed CEO Kevin Ali: an internal investigation revealed improper sales practices for the Nexplanon contraceptive implant. It was being sold more than customers needed in order for the company to meet its plan. The company's stock is now recommended to be held by two analysts and sold by two more.

Shares of KalVista Pharmaceuticals, a small-cap developer of therapies for a rare disease, rose 39% in trading on Wednesday, April 29. Biotech said it will be bought at a premium to the market by Italian drugmaker Chiesi. The deal is valued at $1.9 billion, which implies a 36% premium to KalVista's weighted average share price over the past 30 days.

KalVista has only one development in its portfolio, Ekterly, the "world's first and only" pill to treat hereditary angioedema, a rare genetic disorder that causes uncontrollable swelling of the skin, face, abdomen and larynx that can be life-threatening. The deal is expected to close in the third quarter of 2026.

Freedom Broker advises to pay attention to the securities of crude oil tanker operator Frontline, its shares may rise by about 15% in the short term. The main reason is the lengthening of routes: each additional day on the road actually reduces the available fleet, which leads to an increase in freight rates. Frontline shares have soared 66% since the beginning of the year. However, OilPrice warns, tanker freight rates are cyclical, and a diplomatic breakthrough would quickly wipe out some of the success. Nevertheless, for now, most on Wall Street are positive: Frontline shares have nine Buy ratings, three Hold ratings and only one Sell rating.

Motley Fool freelance analyst Will Healy recommends avoiding shares of quantum computing company Rigetti Computing, or buying them only for speculation. The company's financial situation is a cause for concern: its revenue fell nearly 35% to $7 million in 2025 amid the suspension of the renewal of one of its government contracts and a delay in the release of its new Cepheus-1-108Q quantum system. Not all analysts agree with Will Healy: the company's securities have 10 Buy ratings, 3 -Hold and one - Sell.