For Weight Watchers, It's All About The Next CEO, Not Oprah

Shares of Weight Watchers International, Inc. WTW were plummeting 9.2 percent on Thursday as the 2017 New Year’s resolution season gets into full swing. The selloff may be mostly profit-taking after a huge positive move in the stock in recent weeks.

Weight Watchers shares took off after the company announced a new media campaign centered around spokesperson and investor Oprah Winfrey, who reportedly lost 40 lbs on the Weight Watchers plan.

In fact, Sidoti analyst Frank Camma said a short squeeze was likely responsible for a large part of the stock’s 20.9 percent gain on Wednesday.

Expert's View

“I’m not discounting the Oprah effect, as [her media campaign] caused a squeeze,” Camma told Benzinga.

Sidoti & Company believes investors should be taking advantage of the dip and loading up on Weight Watchers shares. Camma believes the stock has plenty of positive catalysts other than Oprah.

“The next Weight Watchers catalyst will be who they choose as CEO,” Camma told Benzinga. “The last CEO did a good job of doing what needed to be done in terms of controlling cost. The next CEO needs to be a visionary and utilize Oprah’s ability.”

Camma said investors shouldn’t sweat the Thursday selloff because the Wednesday short squeeze simply drove shares too high too fast. Sidoti maintains a Buy rating on Weight Watchers and a $28 price target on the stock.

At last check before publication, shares of Weight Watchers had slightly rebounded, seen down 6.44 percent at $12.49.