Summary

  • Morgan Stanley recently upgraded its rating on WW International Inc. (NASDAQ: WW) from ‘equal weight’ to ‘overweight’.
  • Morgan Stanley believes WW’s recent acquisition of Sequence, a GLP-1 obesity drug telehealth platform, is set to bring growth in business.
  • WW stock has surged by 84.3% for the one-month period ending on Wednesday, July 26, 2023.

Broker Morgan Stanley recently upgraded WW International Inc. (NASDAQ: WW) to ‘overweight’ from its previous ‘equal weight’ rating on the stock. The rating upgrade has led to a 7.35% jump in WW’s share price to US$10.66 premarket.

WW International Inc. is a weight management firm that offers dietary and wellness solutions to its clients. These wellness solutions also include sleep tracking, mental health, and nutrition services that customers can access through the company’s mobile application.

WW International has a market cap of over US$907 million. The stock has a mean recommendation rating of 2.7 on a scale of one to five, as per data available on EODHD/Others. Here, one represents a ‘strong buy’ rating and five represents a ‘strong sell’ rating.

WW Price Chart; Image Source: WW EODHD/Others

A look at WW’s price performance through the year

WW’s closing price on Wednesday surpassed its consensus mean price target of US$9.7 as per EODHD/Others data. The stock price surge, majorly fueled by the rating upgrade from Morgan Stanley, lead to WW reaching its highest value over the past six months.

D.A Davidson & Company also upgraded WW to a ‘buy’ rating on July 25, 2023. As per EODHD/Others data, three analysts recommend buying the stock, three recommend holding it and one analyst recommends selling the stock. None of the analysts have given WW a ‘strong buy’ or ‘strong sell’ rating.

The stock has surged by a whopping 84.3% over the one-month period ending on Wednesday, July 26, 2023. Meanwhile, its YTD gain is 198.9% as at the end of trade on Wednesday, meaning that WW has more than doubled in this year so far.

WW also received a price target increase from Morgan Stanley from US$5 to US$13. As per the new price target, WW has an upside potential of 12.65% over its closing price on Wednesday.

Recent acquisition of telehealth platform set to drive growth for WW

Broker Morgan Stanley stated that WW’s recent acquisition of Sequence, a GLP-1 obesity drug telehealth platform, is set to bring growth in business. The equity analyst believes that the acquisition should offset any declines in the company’s core business.

With Sequence, WW can potentially utilize its brand and lapsed member base to bring low-cost subscription growth, as per Morgan Stanley. The broker also stated that the near-term catalyst path is one of the most robust among its coverages.

Additionally, an overall bullish view can be expected for WW over the next six months. In its March 2023 financial release, WW International reported transaction costs worth US$3.2 million related to the acquisition of Sequence.

Image source: ©2023 Kalkine®; Data source: Company Reports

Meanwhile, its revenue generated for the quarter was US$241.9 million and the gross profit was US$119.5 million. The results for Q2 2023 will be released on August 3, 2023.