Shares soared as much as 44% Tuesday
Author of the article:
Bloomberg News
Carmen Reinicke
Published Apr 11, 2023 • Last updated 2 days ago • 1 minute read
A statue of a girl facing the Wall St. Bull in the financial district in New York. Photo by Brendan McDermid/Reuters/File Photo Shares of WW International Inc., previously known as WeightWatchers, soared as much as 44 per cent Tuesday in its largest move since March after it gained a new Wall Street bull, following the closing of its acquisition of a telehealth provider that will help it access the growing market for new obesity drugs.
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Access articles from across Canada with one account Share your thoughts and join the conversation in the comments Enjoy additional articles per month Get email updates from your favourite authors Goldman Sachs Group Inc. analyst Jason English upgraded his rating on the stock to buy from neutral following the companies acquisition of Weekend Health Inc. (a.k.a. Sequence). English also raised his price target on WW to US$13 from US$3.80, implying that shares could surge 216 per cent from their close on Monday.
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“We believe a catalyst for a turnaround has emerged with its new obesity drug on-ramp solution,” he said in a note. “With the now completed acquisition of Sequence, WW will begin to offer a pharmaceutical based clinical subscription service that it can integrate with its legacy behavioural based weight management offering.”
Tapping into the burgeoning market should boost WW’s earnings per share, leading the stock higher, he said. English’s price target makes him the biggest WW bull on the Street, according to data compiled by Bloomberg.
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Recommended from Editorial 3 specialized vehicles to keep conservative 60/40 investors happier 5 things about investing I wish I had known in 1985 Meta is the hottest tech stock in the market right now WW first announced that it struck a US$132 million deal with Sequence in March. It marked an important shift for WW to incorporating an emerging class of weight-loss drugs, which have been subject to social media frenzies and shortages as they’ve become popular.
That news also sent the stock up 79 per cent in one day, a gain that has since been largely eroded as investors mull WW’s declining subscribers and revenue. The stock, which reached highs of more than US$100 per share in 2018, now trades in the US$4 range.
Bloomberg.com