Things were starting to look up for gym operator Planet Fitness (NYSE:PLNT) as it recovered from the COVID-19 era beatdown. But that turned around when a new issue surrounding a transgender gym member stepped in and prompted threats of a boycott. The move didn’t sit well with investors, who pulled out rapidly and took nearly 4% of Planet Fitness’ market cap with them in Tuesday afternoon’s trading.
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The whole thing started when a transgender customer was found shaving in the women’s locker room. This, in turn, left several other customers deeply concerned about the presence of “…a [biological male] in the female locker room.” They felt “uncomfortable” and, thus, sought to have said transgender customer removed from the premises.
This, naturally, ran headlong into Planet Fitness’ key corporate maxims of being a “judgment-free zone” and being “…committed to creating an inclusive environment.” Indeed, Planet Fitness declared this the hill it would die upon, and not only left the transgender customer’s membership intact but revoked the membership of the first woman who complained about it.
Trouble Ahead
Since this is a hot-button issue in the present-day world, it was safe to say that Planet Fitness would ultimately lose somewhere. And with gyms increasingly finding themselves in trouble thanks to the rise of weight-loss drugs that make working out a lot less necessary than it once was, the end result is certainly not good.
With Fox News Radio already calling for customers to “Bud Light” Planet Fitness—referring here to the multi-month boycott that hit parent company Anheuser-Busch Inbev (NYSE:BUD)—this likely will not end well for Planet Fitness. Throw in recent layoffs and a shifting CEO position, and Planet Fitness’ position only worsens.
What Is the Stock Price Forecast for Planet Fitness?
Turning to Wall Street, analysts have a Strong Buy consensus rating on PLNT stock based on 11 Buys and three Holds assigned in the past three months, as indicated by the graphic below. After a 23.52% loss in its share price over the past year, the average PLNT price target of $72.54 per share implies 25.46% upside potential.
