Shares of WeightWatchers parent company WW International (WW) have rocketed 40% higher on news that the company plans to sell obesity medications.
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Specifically, WeightWatchers is planning to sell Swedish pharmaceutical company Novo Nordisk’s (NVO) popular weight loss drug Wegovy through its website. WeightWatchers said it will market the medication as part of its comprehensive weight-management programs, and that Wegovy will sell at a starting price of $129.
WeightWatchers is joining several telehealth companies, such as Noom and Hims & Hers Health (HIMS), that also sell Novo Nordisk’s Wegovy weight loss drug. Novo Nordisk’s Wegovy and Eli Lilly’s (LLY) Zepbound weight loss medications that are used to treat obesity have proven to be extremely popular, resulting in supply shortages.
A Reversal of Fortune for WW Stock
News that WeightWatchers will begin selling obesity drugs represents a huge reversal for WW stock. The company’s share price had fallen more than 80% this year and trades as a penny stock because of fears that weight loss medications will put WeightWatchers out of business. The stock declined from trading above $100 in 2018 to below $1 in August of this year.
WW International’s stock fell sharply after celebrity promoter Oprah Winfrey severed ties with the company. Oprah resigned from the WW International’s board of directors and donated her stock in the company to charity after disclosing that she was using weight loss medications rather than the WeightWatchers program that focuses on healthy eating and portion control.
Last year, Weight Watchers long-time rival Jenny Craig filed for bankruptcy and announced plans to shutter its business, citing the impact of weight loss drugs.
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 132.12% upside from current levels.
