(Bloomberg) — Shares of WW International, previously known as WeightWatchers, soared as much as 44% 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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Goldman Sachs analyst Jason English upgraded his rating on the stock to buy from neutral following the companies acquisition of Sequence. English also raised his price target on WW to $13 from $3.80, implying that shares could surge 216% from their close on Monday.
“We believe a catalyst for a turnaround has emerged with its new obesity drug on-ramp solution,” he wrote 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 behavioral 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.
WW first announced that it struck a $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% 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 $100 per share in 2018, now trades in the $4 range.
(Updates stock move after market open)
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