Planet Fitness (PLNT) cut at Jefferies as CEO departure ‘could create more uncertainty’
Planet Fitness (NYSE:) was downgraded to Hold from Buy at Jefferies on Monday, with analysts lowering the price target to $56 from $90 per share.
They cut the stock following the shock news on Friday that the PLNT board has ousted experienced CEO, Chris Rondeau. The company’s shares fell over 15% following the news.
“The recent leadership change, higher interest rates, and ongoing inflationary pressures are likely to continue to impact the company’s near-term growth potential,” said the analysts.
“While Interim CEO Craig Benson has served on PLNT’s Board (since 2017) and is a PLNT franchise owner (since 2012), we believe a leadership change at this juncture could create more uncertainty regarding the company’s go-forward growth potential,” they added.
While the analysts noted positive aspects of the company, such as its capital-light, low-risk model and large and growing unit presence, they also believe Rondeau was instrumental in building PLNT into the company it is today, and his departure is a “loss for franchisor/franchisee relationships.”