Peloton slumps after US agency warns on treadmill risks
Peloton Interactive Inc. shares fell nearly 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+.
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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 $108.62 at the open, briging its decline so far this year to 25.8%.