Peloton Interactive shares were down about 6% in the pre-opening session after the U.S. Consumer Product Safety Commission (CPSC) warned people with kids and pets to stop using the company’s treadmill.
Don't Miss Our Christmas Offers:
- Discover the latest stocks recommended by top Wall Street analysts, all in one place with Analyst Top Stocks
- Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter
The commission issued the warning after the death of a child and injuries to others. It acknowledged the knowledge of 39 incidents of injuries including one death due to the use of the treadmill.
In response, Peloton (PTON) said, ‘There is no reason to stop using the Tread+, as long as all warnings and safety instructions are followed. Children under 16 should never use the Tread+, and Members should keep children, pets, and objects away from the Tread+ at all times.
Peloton added that its classes now also include safety messages to keep children, pets and objects clear of the tread+ during workouts and to remove the safety key and keep it out of children’s reach post-workout. (See Peloton stock analysis on TipRanks)
Additionally, the company noted that it was open to working with CPSC to ensure the safety of its members.
Today, Truist Financial analyst Youssef Squali reiterated a Buy rating on the stock and maintained a $160 price target (37.7% upside potential).
Reacting to the CPSC warning to Peloton, Squali said it is a “black eye” for Peloton’s PR but he does not see a significant impact on Peloton’s P&L.
Consensus on the Street is that Peloton is a Strong Buy based on 19 Buys, 4 Holds and 1 Sell. The average analyst price target of $164.27 implies upside potential of 41.4%. Shares have gained about 219.7% over the past year.
Related News:
DraftKings Inks Betting Deal With NFL; Shares Up 5.3%
PepsiCo Beats 1Q Estimates; Reiterates Outlook
Dell To Spin-Off 81% Stake In VMware; Shares Pop 8.5%
