On Tuesday, Stifel reiterated its Buy rating on Planet Fitness (NYSE: NYSE:PLNT), maintaining the $80.00 price target for the company's stock. The firm addressed the recent concerns regarding a potential boycott of Planet Fitness gyms following a locker room incident that sparked social media backlash. Despite the heightened social media comments, Stifel believes that the impact on the company's reputation will be transient.
Planet Fitness has defended its policies in the wake of the incident, as the company faces an intensifying debate online. Stifel emphasized the importance of the company's response and control over the narrative, noting that while social media comments may be fleeting, news stories have a more lasting effect. The firm suggested that positive media coverage of Planet Fitness's "judgement free" brand ethos could mitigate any negative perceptions stemming from the incident.
Stifel also pointed out the potential overreaction of the market to the situation, citing that first-quarter new memberships are anticipated to be strong. According to the firm's belief, the joins in the first quarter are expected to meet or exceed the Street's average estimate, showing an increase of 890,000 from the fourth quarter of 2023.
The company's efforts to manage the unfolding narrative will be closely monitored in the upcoming days. Stifel's stance indicates a confidence in Planet Fitness's ability to navigate the current social media storm and maintain its brand reputation.
The financial firm's outlook on Planet Fitness remains positive, with the expectation that the current social media controversy will not have a lasting negative impact on the company's membership growth or stock performance.
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