A controversial TV ad which was aired by Peloton Interactive after Thanksgiving has resulted in the valuation of the company declining by $1.6 billion and its share price declining by 16%.  The decline has created an opportunity to make 15% by early next year for two reasons:

  • P.T. Barnum said, “There’s no such thing as bad publicity.”   This is especially true for Peloton.   The “give the gift that gives” ad is about a digital exercise bike that enables one to lose weight or remain fit has been the brunt of late-night talk show hosts and radio jocks.  The timing for the controversial ad which has burned the Peloton brand into the brains of consumers could not have been better. From now through the end of December millions will include health and fitness in their New Year’s resolutions. 

 

  • Based on the technical chart below support for the share price is approximately $30.00 per share.

My prediction is that Peloton’s revenue and earnings will be much higher than the analyst estimates when it reports its financial results for its quarter ending December 31, 2019 in early 2020. 

This will result in the share price increasing by $5.00 per share from a recent $32.00 to above its recent high of $37.00. A $5.00 per share gain would be equivalent to a 15% profit.    

Click below to view the extremely controversial ad which has been labeled as sexist and classist by social media and the press.