American exercise equipment and media company Peloton Interactive, Inc. (PTON) released a commercial advert on Sunday as a precautionary measure to restore its image, which was tarnished by a scene in the new show, “And Just Like That.” In the episode, a Peloton Bike was involved in the death of fictional character, Mr. Big, acted by Chris Noth, who suffers a heart attack after taking a peloton bike class, according to Reuters.
Shares of the company fell 11.3% last Thursday and another 5.4% on Friday following the viewing of the episode. However, PTON shares managed to recover some of their losses, rising 7.4% on Monday after the ad went viral.
Though Peloton was aware of the use of one of its exercise bikes in an episode of the new show, a sequel to the popular series Sex and the City, the fatal heart attack after using the bike was unknown.
The tongue-in-cheek commercial featured the same actor, Chris Noth, contradicting the scene in the episode by saying, “I feel great. Shall we take another ride? Life’s too short not to.” The ad ends with a statement about the health benefits of regular cycling.
Wall Street’s Take
Following the recent price movements, Credit Suisse analyst Kaumil Gajrawala downgraded the stock to a Hold from a Buy and slashed the price target to $50 (21% upside potential) from $112.
According to Gajrawala, the episode wasn’t the only reason for his rating cut. Increased spending on activities that were restricted during lockdowns, the reopening of gyms, and other in-person fitness options also acted as catalysts for the downtrend in the company’s share price.
The rest of the Street is cautiously optimistic about the stock, with a Moderate Buy consensus rating based on 11 Buys, 13 Holds, and 2 Sells. The average Peloton price target of $75.83 implies 83.43% upside potential. Shares have lost 66.1% over the past year.
TipRanks’ Website Traffic Tool, which uses data from SEMrush Holdings (SEMR), the world’s biggest website usage monitoring service, offers insight into Peloton’s performance this quarter. According to the tool, the Peloton website recorded a 2.84% decrease in global visits in November compared to the same period last year. Also, a quarter-to-date comparison showed a decline of 8.02% compared to Q2 2021, while year-to-date website traffic growth stands at 40.76%.