Weight Watchers’ stock price has plummeted on the rise of revolutionary diet pills, but Wall Street analysts say the company is still making money from members who are “vomiting guts” from taking drugs like Ozempic. It is said that it can be obtained.
WW International stock fell 25% on Thursday after Oprah Winfrey announced she was resigning from the diet company’s board to “eliminate any perceived conflict of interest related to taking weight loss drugs” — and this is true. she admitted last year Amid widespread speculation about her slim figure.
Winfrey’s departure has heightened questions about the relevance of Weight Watchers, but side effects of drugs like Ozempic and Wigovy are still causing weight loss patients to say, “What to do when you’ve eaten too much at a restaurant and are throwing up your organs?” They need advice,” said Linda Bolton Weiser, an analyst at DA Davidson.
“They need advice on what to do with their loose, excess skin after losing 100 pounds,” Bolton Weiser wrote in a research note to clients on Monday. “That’s why investors buy Weight Watchers instead of Eli Lilly or Nordisk.”
Bolton Weiser’s Weight Watchers Investor has a Buy rating and a $12.50 price target.
WeightWatchers stock fell 3.8% to $3.25 on Monday. It is down 53% from $7 a year ago and 83% from its October peak of $13.21.
Bolton Weiser poses the question, “Why would an investor be interested in investing in Weight Watchers, which prescribes a weight-loss drug, when they could invest in Eli Lilly or Nordisk, the makers of that drug?” He said he was answering to young analysts.[s]” according to the memo.
The New York-based company’s stock has plummeted over the past year as diet pills have gone mainstream, undermining traditional diet brands like Weight Watchers.
A year ago, Weight Watchers paid $106 million to acquire Sequence, a telemedicine subscription service that prescribes Ozempic and other weight-loss drugs.
The company’s CEO, Shima Sistani, said on an earnings call last week that Weight Watchers sells diet pills that cost about $100 a month for prescription services and access to Weight Watchers clinics. He said he is focused on providing “care” to new customers taking the drug. .
“We’re going to go into the market now and communicate the fact that what we’re offering is great care and membership to help them with their weight health,” Sistani said in last week’s financial results. He spoke at a press conference. He said the word “care” 19 times.
Meanwhile, Winfrey’s relationship with Weight Watchers ended last week after a nine-year relationship in which the stock price soared every time Winfrey posted about her weight loss and eating habits on her social media accounts. .
Over the summer, Winfrey reduced her stake in the company from about 10% to just 1.4%.
