WW, formerly Weight Watchers International Inc. WTW, -4.87% shares sank 5.5% in Friday premarket trading after the wellness company was downgraded to sell at J.P. Morgan after channel checks show weakness during the New Year’s resolution enrollment period. J.P. Morgan slashed the price target to $37 from $70. With a goal of reaching $2 billion-plus in revenue by the end of 2020, WW expected about 80% of revenue growth to be driven by recruitment and retention. “[O]ur checks have indicated that traffic to WW’s website and engagement on the company’s mobile app are down double digits year-over-year according to SimilarWeb data, which we see as a signal that new member growth thus far is starting the year slower than anticipated,” J.P. Morgan wrote. Analysts say WW could make up for it later in the year since some of it could be shutdown-related, and it’s still early in the season. But WW could also be seeing its market share shifting to a new brand, Noom. WW shares have sunk 41.8% over the last 12 months while the S&P 500 index SPX, -0.19% is down 6.6% for the period.
Weight Watchers International Inc. shares were trading at $33.35 per share on Friday afternoon, down $1.73 (-4.93%). Year-to-date, WTW has declined -13.49%, versus a 3.34% rise in the benchmark S&P 500 index during the same period.
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