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Peloton Slumps After U.S. Agency Warns on Treadmill Risks

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Kit Rees
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(Bloomberg) -- Peloton Interactive Inc. shares fell over 8% Monday after U.S. regulators warned consumers to stop using the exercise equipment maker’s Tread+ machine if there are young children or pets at home.

The advisory follows a series of accidents involving the treadmill and the U.S. Consumer Product Safety Commission (CPSC) said Saturday it is continuing to investigate incidents of injury or death related to the Tread+.

Peloton said in a statement that it was “concerned” by the commission’s warning, which it termed “misleading and inaccurate.” There’s no reason to stop using the Tread+ as long as all warnings and safety instructions are followed, it said.

JPMorgan Chase & Co. analyst Doug Anmuth reiterated his overweight rating on the stock and recommended buying during any pullback in the shares related to the CPSC’s warning.

“Peloton emphasizes that the Tread+ is safe when its warnings and safety instructions are followed, and the company will neither stop selling nor recall the Tread+,” Anmuth said in a research note. He doesn’t expect the recent incidents or the CPSC’s warning to further delay Peloton’s launch of its new lower-priced Tread in the U.S., he added.

The stock hit a low of $106.28 at the open, bringing its decline so far this year to 30%.

What Bloomberg Intelligence Says:“The Tread+ warning may not significantly slow Peloton’s near-term growth prospects, given that sales of exercise bikes still represent over 90% of hardware revenue. However, it could keep some customers from buying new treadmills.”-- Amine Bensaid, BI media analystClick here to read the research.

READ MORE: U.S. Regulators Warn Consumers About Peloton’s Tread+ (1)

(Updates share prices, adds Bloomberg Intelligence comments in last paragraph.hcpi)

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©2021 Bloomberg L.P.

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