Peloton, Xponential, Planet Fitness Stocks Slide As Senate Drops Personal Health Investment Today Act Provision

Shares of Peloton fell despite Bank of America maintaining a Buy rating and $9.50 price target, with the firm noting “plenty of catalysts not priced into shares.”

Peloton Interactive shares dropped 10% on Tuesday after the Senate version of the budget reconciliation bill dropped the Personal Health Investment Today (PHIT) Act provision, which would have allowed individuals to pay up to $500 ($1,000 per family) of pre-tax dollars in HSA accounts for physical fitness activities.

Shares of Peloton ended the session at $6.12.

Other fitness stocks also declined, with Xponential Fitness (XPOF) falling 5.7% and Planet Fitness (PLNT) slipping 2.2% on the day.

The original House proposal allowed HSA funds to be used toward gym memberships, exercise classes, and equipment such as Peloton bikes. 

Bank of America analyst Curtis Nagle said in an analyst note that the Senate bill's exclusion is “disappointing and potentially removes a new driver of connected subscriber growth. "

Despite the setback, BofA maintained its ‘Buy’ rating on Peloton with a $9.50 price target, saying the firm still sees “plenty of catalysts not priced into shares” and that the development does not fundamentally change its thesis on Peloton.

On Stocktwits, retail sentiment was ‘bearish’ for Peloton and Planet Fitness, and ‘neutral’ for Xponential Fitness, with message volume ranging from low to normal across the three stocks.

Year-to-date, Peloton is up 30.8%, Planet Fitness has gained 3.1%, while Xponential Fitness is down 43.8%.

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