J.P. Morgan added Weight Watchers to the agency’s record of “obese” shares, saying the load loss firm is poised for “outsized” development because it seems so as to add extra big-name celebrities by means of its partnership with Oprah Winfrey.
“Administration stabilized the trajectory … by revamping its factors program, considerably bettering the cellular platform, and recruiting pivotal social media influencers,” J.P. Morgan analyst Christina Brathwaite wrote in a word.
“Winfrey is and can proceed to be a key promoting associate [as the company expands] by broadening its social media influencer base,” Brathwaite stated, 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 p.c in early buying and selling Tuesday. The inventory was up 96 p.c previously 12 months by means of Monday’s shut at $86.90. J. P. Morgan’s value goal of $105 a share is 21 p.c increased than that closing value.
Partnering with Winfrey was certainly one of “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 utility – 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 p.c of Weight Watchers’ inventory and is on the board of administrators, signed a promotional deal that lasts till October 2020. Her function as a Weight Watchers spokeswoman is a crucial asset “for the corporate given her advertising and marketing clout within the U.S.,” Brathwaite wrote.
J.P. Morgan stated it believes the corporate advantages from “Winfrey’s extensive community of influential senior leaders throughout firms within the U.S.”
The corporate reaches members as they observe the progress of movie star endorsers who’re going by means of weight reduction and well being enchancment applications. It goals to extend engagement with particular demographics by means of the regular sharing of data on social media “moderately than conventional weight reduction adverts” depicting earlier than and after photos, Brathwaite wrote.
It additionally has been attempting to increase past a definite buyer demographic, as the typical member is dominantly feminine, white and about 50 years outdated. As an alternative of selling 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 enhance male membership.
Supply hyperlink – https://www.cnbc.com/2018/06/12/j-p-morgan-weight-watchers-stock-to-rally-thanks-to-influencers.html