Weight Watchers stock to rally thanks to influencers
J.P. Morgan added Weight Watchers to the agency’s listing of “obese” shares, saying the load loss firm is poised for “outsized” progress because it seems to be so as to add extra big-name celebrities by way of its partnership with Oprah Winfrey.
“Administration stabilized the trajectory … by revamping its factors program, considerably enhancing the cellular platform, and recruiting pivotal social media influencers,” J.P. Morgan analyst Christina Brathwaite wrote in a be aware.
“Winfrey is and can proceed to be a key promoting associate [as the company expands] by broadening its social media influencer base,” Brathwaite mentioned, including that Weight Watchers this 12 months signed file producer DJ Khaled, chef Eric Greenspan, comic Kevin Smith and singer Hélène Ségara as influencers.
Shares of Weight Watchers rose greater than 5 % in early buying and selling Tuesday. The inventory was up 96 % prior to now 12 months by way of Monday’s shut at $86.90. J. P. Morgan’s value goal of $105 a share is 21 % increased than that closing value.
Partnering with Winfrey was one in all “three key occasions” in 2015 that “helped stabilize gross sales” in 2016, Brathwaite wrote. Mixed with the opposite two key occasions – overhauling its factors program and the brand new WW cellular software – Weight Watchers is now heading steadily towards is annual income goal of over $2 billion by 2020, based on Brathwaite.
Winfrey, who owns about eight % of Weight Watchers’ inventory and is on the board of administrators, signed a promotional deal that lasts till October 2020. Her position as a Weight Watchers spokeswoman is a vital asset “for the corporate given her advertising clout within the U.S.,” Brathwaite wrote.
J.P. Morgan mentioned it believes the corporate advantages from “Winfrey’s vast community of influential senior leaders throughout firms within the U.S.”
The corporate reaches members as they comply with the progress of superstar endorsers who’re going by way of weight reduction and well being enchancment packages. It goals to extend engagement with particular demographics by way of the regular sharing of data on social media “quite than conventional weight reduction adverts” depicting earlier than and after photos, Brathwaite wrote.
It additionally has been making an attempt to increase past a definite buyer demographic, as the common member is dominantly feminine, white and about 50 years previous. As an alternative of promoting particularly towards males, Brathwaite wrote that J.P Morgan believes that Weight Watchers’ rebranding as “WW” showcases the corporate “as a way of life model,” whereas the addition of male influencers like Khaled and Greenspan may also assist improve male membership.
Supply hyperlink – https://www.cnbc.com/2018/06/12/j-p-morgan-weight-watchers-stock-to-rally-thanks-to-influencers.html