Weight-loss drugs may be a "solution" to Weight Watchers' woes, a Goldman Sachs analyst says
The anti-diabetic medication Ozempic, made by Danish pharmaceutical company Novo Nordisk. Photo: JOEL SAGET/AFP via Getty Images
Weight Watchers shares soared Tuesday after a Goldman Sachs analyst heralded the company's plan to take advantage of the surging interest in weight-loss drugs.
Driving the news: With a database of about 4 million members and another 20 million former members, WW is uniquely positioned to promote its newly acquired "pharmaceutical based clinical subscription service" Sequence to people who want to lose weight, Goldman analyst Jason English wrote.
- English set a 12-month price target of $13 for WW shares — nearly triple Monday's closing price.
- The stock was up 50% to over $6.20 early Tuesday afternoon.
The big picture: WW CEO Sima Sistani told Axios in March that the company plans to embrace weight-loss drugs as "a recognition finally of the fact that there are biological and genetic underpinnings to obesity — and that in some cases willpower alone is not enough."
- The company, facing declining membership and a falling stock price, has been cutting costs, including by closing hundreds of meeting locations.
- But the increasing popularity of drugs like Ozempic and Wegovy is changing the conversation regarding weight loss efforts.
The bottom line: Weight loss drugs may be "a solution" to the company's woes, English wrote.
Source: Read Full Article