Analysts maintain a pessimistic view of WeightWatchers parent company WW International (WW) despite investors new found enthusiasm for the stock.
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WW stock rose nearly 40% on October 9 after the company announced that it will begin selling weight loss medications through its website and incorporate them into its weight management programs that focus on diet, exercise, and portion control. WW International’s share price is up another 22% today (October 10).
Despite investor enthusiasm, analysts have come out to reiterate their negative outlook on the company and its stock. Analysts at Morgan Stanley (MS) and Craig-Hallum have reiterated Hold ratings on WW stock with price targets that imply 38% to 48% downside risk from current levels. British bank Barclays (BCS) has reiterated a Sell rating on WW International stock and a price target that is 61% below where the shares currently trade.
A Grim Outlook for WW International
Despite the pivot to selling weight loss medications, WW International faces a lot of hurdles. The company’s stock fell more than 80% this year and is trading on the penny stock league tables over growing concerns that weight loss drugs will put the company out of business. Those fears accelerated after WeightWatchers competitor Jenny Craig filed for bankruptcy last year.
In 2018, WW stock was trading above $100 per share. At the end of August this year, the share price was trading below $1. The company also lost celebrity spokesperson Oprah Winfrey earlier this year and has been laboring under about $1.5 billion of debt with less than $150 million of cash on hand. The situation has led some analysts to forecast that WW International might also file for bankruptcy.
Is WW Stock a Buy?
WW International stock has a Consensus Hold rating among four Wall Street analysts. This rating is based on one Buy, two Hold, and one Sell ratings issued in the last three months. The average WW price target of $3.83 implies 105.91% upside from current levels.
