Peloton erases losses and rallies 9% after signing a multiyear deal with Beyoncé

Advertisement
Peloton erases losses and rallies 9% after signing a multiyear deal with Beyoncé
Beyonce Knowles-Carter attends "The Lion King" European Premiere at Leicester Square on July 14, 2019 in London, England.Dave J Hogan/Getty Images

Peloton shares erased early losses and climbed as much as 8.6% on Tuesday after the company announced a multiyear deal with Beyoncé to produce exclusive workouts.

The superstar was the most requested artist among Peloton's 3.6 million users, Peloton said in a press release. It said that the launch of the collaboration coincided with homecoming, an annual fall celebration for students at historically Black colleges and universities, and that Beyoncé and Peloton created a series of homecoming-themed workouts across fitness categories including cycling, running, and yoga.

The fitness-equipment company and Beyoncé also said they would give two-year Peloton subscriptions to students at 10 historically Black colleges and universities through the launch.

Advertisement

The announcement led Peloton to outperform other stay-at-home stocks throughout the session. US equities traded mixed on Tuesday as investors continued to pivot from growth stocks and tech giants to reopening plays and small-caps. While stay-at-home peers such as Amazon, DocuSign, and Zoom tumbled, Peloton rallied into the afternoon.

Read more: Buy these 21 overlooked stocks set for huge gains as the world's vaccine hopes just became a reality, Jefferies says

Peloton has notched several record highs in recent months as demand for its home exercise hardware has skyrocketed. Gym closures and stay-at-home orders drove people to its bike and treadmill, and wait times for its products quickly increased. The company reported sales growth of 232% in its most recent quarter and beat expectations for quarterly earnings.

Advertisement

Tuesday's rally retraced only some of Peloton's Monday slump, and shares sit far from their mid-October peak. The company sank as much as 25% on Monday as news about Pfizer's vaccine development shifted investor capital to reopening trades from popular quarantine picks.

Peloton traded at $104.73 per share as of 1:50 p.m. ET, up 277% year-to-date. The company has 45 "buy" ratings, four "hold" ratings, and one "sell" rating from analysts.

Now read more markets coverage from Markets Insider and Business Insider:

Advertisement

Spiking coronavirus cases could curb economic growth well into 2021, Dallas Fed President says

US job openings climb slightly in September but miss expectations as labor-market recovery slows

8 world-class investors share how they've positioned to profit from the long-awaited COVID-19 vaccine breakthrough — and the bets they've been making all year on a post-pandemic world

Advertisement

{{}}