The weekend focus is on sports equipment manufacturers. Yesterday the Peloton stock lost 2.5 billion dollars of market value on Wall Street, closing down 24% to 24 dollars after some rumors revealed by the CNBC. According to sources, the manufacturer of exercise bikes has decided to temporarily stop the production of its sports equipment, ie high-end exercise bikes and treadmills, due to the “significant drop” in demand.
Peloton had an incredible success during the pandemic, registering + 434% on Wall Street in 2020, and then suffering sharp drops, also due to the withdrawal from the market of its “Tread” and “Tread +” treadmills due to safety concerns. Equita Sim points out that the stock then recovered 10% in the after hour after a press release that anticipated a preliminary second quarter revenue in line with the guidance (results expected for February 8) and a lower EBITDA loss. to forecasts: -260/270 compared to guidance at -325/350. Furthermore, the group’s CEO rejected the rumors, deeming them incomplete and arguing that the company is redefining the cost structure with a view to greater flexibility.
Equita Sim (rating buy and target price of 11 euros on the share of the Italian group Technogym) reports, however, that from February Peloton will charge customers the installation / delivery costs on some products, such as 250 dollars for the bike + or 350 dollars for the treadmill. “Overall, these elements confirm the slowdown in demand for home fitness in the US and the difficulties related to the supply chain / increase in input costs”, explain the analysts.
In Italy, Technogym also saw a slowdown in sales in the third quarter when it recorded a 73% growth on the pre-covid period instead of the + 114% in the second quarter, and a 1% decrease year on year compared to +16. % of the previous semester. “However, Technogym is better positioned than Peloton in the medium term given the more mature and competitive context of the American home fitness market compared to Europe and the lower penetration of the company in this segment. In addition, two thirds of the company’s business. Italian are in B2B, exposed to the progressive normalization of the pandemic “, explain Equita analysts for whom the further pressure of recent months could make margin expectations for 2022 a little challenging.
For its part, Banca Akros highlights that, although the read-across method with Technogym is not immediate due to substantial differences in brand perception, prices, equipment performance and main geographic exposure, the gradual reopening of the activities could suggest a slower pace of growth for the B2C segment in 2022 and 2023. “This will likely be compounded by higher-than-expected inflation which will be difficult to translate into higher prices,” explain analysts who have a reduce rating on the stock and today they have filed the target price from 8 to 7 euros. In the pre-market the Peloton stock is now trading up by 6.52% to 25.89 dollars, while Technologym drops by 2.64% to 7.74 euros at Piazza Affari. (All rights reserved)
