Macro trends are favorable for WW International Inc WW, and its digital shift is likely to boost margins and capital returns, according to Jefferies.
The WW International Analyst
Stephanie Wissink initiated coverage of WW International with a Buy rating and $32 price target.
The WW International Thesis
The COVID-19 health crisis has unlocked a durable trend of making wellness a priority, which creates better growth prospects for WW International, Wissink said in a Tuesday initiation note. (See her track record here.)
Established brands with modern platforms are well-positioned in today's environment, “given scale, resources to acquire & retain customer relationships, and to develop unique content & connected communities,” the analyst said.
WW International has reinvented itself, creating a new brand with a digital experience known as myWW, she said.
With this, the company has expanded beyond diets, Wissink said. While the company previously addressed an $18-billion weight management market, its shift to overall wellbeing implies a target market of $300 billion, the analyst said.
WW International faces a “multi-year growth trajectory” in subscriptions and revenue per user, she said.
“We are intrigued by WW's position as an accessibly priced, leading digital solution for individuals who seek & will pay for an integrated wellness lifestyle platform.”
WW Price Action
Shares of WW International were up 8.32% at $25.44 at the time of publication Wednesday.
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