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Weight Watchers Shares Hit a Record New High After JPMorgan Did This


Shares of Weight Watchers (NYSE:WTW) have more than doubled this year and soared over 13% alone when Oprah Winfrey took a stake in the company.

Recently the stock hit an all-time record high after J.P. Morgan initiated coverage on the company and gave it an “overweight” rating.

JPMorgan analyst Christina Brathwaite wrote in a note, “Management stabilized the trajectory … by revamping its points program, significantly improving the mobile platform, and recruiting pivotal social media influencers.”

“Winfrey is and will continue to be a key advertising partner [as the company expands] by broadening its social media influencer base,” Brathwaite remarked.

According to Brathwaite Weight Watchers has made some lucrative moves by adding more sponsors including DJ Khaled, chef Eric Greenspan, singer Hélène Ségara, and comedian Kevin Smith just this year.

“Following three years of double-digit revenue and earnings pressure through 2015, management stabilized the trajectory, repositioning the company for outsized growth by revamping its points program, significantly improving the mobile platform, and recruiting pivotal social media influencers,” J.P. Morgan analysts also wrote.

Oprah Winfrey has over 42 million Twitter followers. It was in 2015 that she tweeted, “I believe in the @weightwatchers program so much I decided to invest, join the Board, and partner in #wwfamily evolution.”

When Winfrey made her investment into the company (NYSE:WTW) in October of 2015, it was worth $43.5 million. Her investment was worth more than $400 million last month.

It was in May that the company reported its first quarter financial report revealing earnings of 56 cents a share on revenue of $408.2 million. Earnings saw a 230% growth from a year earlier. Analysts had only been expecting earnings of 7 cents a share on revenue of $392 million.

More notably the company ended the quarter with 4.6 million subscribers. This is the highest level in the history of the company.

“We’re thrilled with the momentum and the execution of the team,” remarked Chief Executive Officer Mindy Grossman at the time.”

She said during the earnings call, “We ended the quarter with 4.6 million subscribers worldwide, the highest level in the history of Weight Watchers, driven by the enthusiastic global response to our new program. To put that into context, that’s an increase of 1 million subscribers from a year ago. Furthermore, our average retention is well over nine months, also the highest level in our company history.”

JPMorgan has given the stock (NYSE:WTW) a price target of $105. The analysts noted that it is time to “stop watching from the sidelines.”

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