A Peloton Interactive Inc. logo on a stationary bike in the company’s showroom in Dedham, Massachusetts, the United States on Wednesday, February 3, 2021.
Adam Glanzman | Bloomberg | Getty Images
Peloton Interactive’s stock movement on Friday is accompanied by a spoiler alert.
The fitness company’s Bike Connected drove a key plot point in the reboot of âSex and the Cityâ on HBO Max, and the company’s reaction to the news is raising questions among investors about its handling of its sound. picture.
In addition, Peloton received a downgrade on Friday, fueling lingering concerns about weakening demand for its products. Credit Suisse analyst Kaumil Gajrawala cut the company’s price target by more than half, from $ 112.00 to $ 50, as he pushed the stock’s rating from outperforming to neutral.
The company’s shares hit their lowest level in 52 weeks at $ 39.16 on Friday, and were recently down more than 5%. Shares on Thursday closed 11.35% lower at $ 40.70. It was the same day as the debut of “And Just Like That …”, the latest iteration of the “Sex and the City” franchise, with the first episode featuring a dramatic scene involving Peloton’s Bike.
Peloton stock is down 73% for the year, giving it a market value of around $ 13 billion.
Peloton was widely seen as a pandemic winner last year, alongside home improvement companies and streaming services. While people would stay home and dry off the gym, they would buy equipment and set up their own home fitness studios. This backdrop has changed as people have been vaccinated against Covid and have started to revert to their old ways.
As sales slowed, the company slashed the price of its original bike by hundreds of dollars and stepped up its marketing efforts. It has also undergone regulatory review and announced a voluntary recall of its treadmills in May, after reports of one death and dozens of injuries.
(The next part of this story contains a spoiler for the first episode of “And just like that …”.)
In recent weeks, Peloton has cut its annual forecast and froze hiring. He made headlines again on Thursday after one of the main characters of “And Just Like That …”, Mr. Big, died after a 45-minute Peloton lesson.
Peloton made a statement to various media about Dr Suzanne Steinbaum, a cardiologist and member of the company’s health and wellness advisory board, said she was saddened by the news of Mr Big’s heart attack. Still, she attributed it to her unhealthy habits.
âMr. Big lived what many would call an extravagant lifestyle – including cocktails, cigars and big steaks – and was in grave danger because he had already had a heart attack in season 6,â he said. she said in a press release.. These lifestyle choices and perhaps even his family history, which is often a big factor, were the likely cause of his death. Riding his Peloton bike may even have helped delay his cardiac event. “
Peloton’s portrayal in âSex and the Cityâ could indicate potential issues with the brand, BMO Capital Markets analyst Simeon Siegel said in a research note. He referred to reports that the company was aware of the product placement, but not their role in the show’s plot.
âWhile it is unlikely to have an impact on sales, it begs the question if PTON is losing degrees of control over its storytelling, perhaps its biggest achievement to date,â he said. . “While all public relations are meant to be good public relations, it’s hard to ignore the changing public perception of Peloton.”
Siegel estimated the company’s stock to be underperforming, with a price target of $ 45, about 13% above its trading level early Friday.
There was no mention of the plot twist “Sex and the City,” notes the Credit Suisse research. Instead, Gajrawala highlighted more fundamental issues the company will face in the coming year. He said Peloton’s exercise equipment is harder to sell as people are on the move again, increasing the likelihood of “zero to low growth. [fiscal year 2022.]”
Another company, Lululemon, has also had issues with home fitness. He acquired Mirror for $ 500 million last year. On Thursday, however, it cut its sales forecast for the device.