Peloton Drops After 'Sex And The City' Character Death, Credit Suisse Downgrade

Shares of Peloton (PTON) are lower in Friday trading after a key character on HBO Max's "Sex and the City" revival died after working out on one of the company's exercise bikes. BMO Capital analyst Simeon Siegel said that while the scene isn't likely to impact sales, it raises the question of whether Peloton is "losing degrees of control" over its storytelling. Meanwhile, in a move not linked to the television show, shares of the connected fitness company were downgraded to Neutral by a Credit Suisse analyst on "demand headwinds".

"SATC" CHARACTER DEATH: Mr. Big, a key character in HBO Max's "Sex and the City" revival, "And Just Like That," was shown dying of a heart attack after a 45-minute workout on a Peloton exercise bike. Big, who is played by Chris Noth, is the on-again-off-again love interest of protagonist Carrie Bradshaw, played by Sarah Jessica Parker. Peloton said it approved the use of the bike as well as the appearance of real-life Peloton instructor Jess King in the show, but did not know "And Just Like That" would show Noth's character collapsing and dying after a 45-minute bike workout. Spokesperson Denise Kelly told BuzzFeed News that "Peloton was aware that a Bike would be used in the episode and that Jess King would be portraying a fictional Peloton instructor," but that "Due to confidentiality reasons, HBO did not disclose the larger context surrounding the scene to Peloton in advance."

In response to Big's death, cardiologist Dr. Suzanne Steinbaum, a member of Peloton’s health and wellness advisory group, said in a statement released by the company that "I’m sure ‘SATC’ fans, like me, are saddened by the news that Mr. Big dies of a heart attack... Mr. Big lived what many would call an extravagant lifestyle — including cocktails, cigars, and big steaks — and was at serious risk as he had a previous cardiac event in season 6. These lifestyle choices and perhaps even his family history, which often is a significant factor, were the likely cause of his death. Riding his Peloton Bike may have even helped delay his cardiac event.” Steinbaum added that "More than 80% of all cardiac-related deaths are preventable through lifestyle, diet, and exercise modifications... The good news is Peloton helps you track heart rate while you ride, so you can do it safely."

LOSING CONTROL OF IMAGE?: BMO Capital analyst Simeon Siegel commented on the situation, contending that though unlikely to impact sales, the news does raise the question of whether Peloton "is losing degrees of control over its storytelling, perhaps its greatest achievement to date," contends Siegel. "Although all PR is supposedly good PR, it's hard to ignore the changing tide in Peloton's public perception," he wrote. Siegel has an Underperform rating on shares of Peloton with a $45 price target.

PELOTON DOWNGRADE: Meanwhile on Friday, Credit Suisse analyst Kaumil Gajrawala downgraded Peloton Interactive to Neutral from Outperform with a price target of $50, down from $112. The analyst says higher mobility, a shift in consumer spending, and the return of in-person fitness are "demand headwinds after a breakneck" fiscal 2021 for the company. Consumers appear fixated on reopening themes and purchases with an unclear timeline for normalization, Gajrawala tells investors in a research note. Over the next year, he thinks these factors increase the likelihood of a "no-to-low growth" in fiscal 2022 for Peloton.

PRICE ACTION: Shares of Peloton are down nearly 6% in morning trading to $38.40.

Disclosure: None

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Sandra Sinclaire 5 months ago Member's comment

When it’s your time to go you can die even when you’re sleeping....