WeightWatchers, now called WW International, pared its Tuesday gains after an analyst initiated coverage and gave it a hefty price target. The weight loss company has soared since reemerging from bankruptcy in June. While not the typical IPO stock, WW stock is among a strong contingent of new issues hitting the market this year.
Novo Nordisk announced on June 27 that WeightWatchers would offer Novo's blockbuster weight-loss drug Wegovy, beginning July 1.
Lucid Capital analyst Alex Fuhrman in a Tuesday research note wrote that WeightWatchers emerged from a voluntary bankruptcy process on June 24 and is "in its strongest position in years." WeightWatchers now has a manageable net debt-to-EBITDA ratio and an "institutionally relevant" market cap of $400 million. Meanwhile, Lucid believes that WeightWatchers' fundamentals are improving.
The firm initiated coverage of WW stock with a buy rating and a 60 price target on shares. That target represents a 50% premium to WW stock's closing price of 40 on Monday.
WeightWatchers filed this year in May for Chapter 11 bankruptcy protection, allowing it to eliminate debt of $1.15 billion owed to creditors. The reorganization process lasted about 40 days.
Meanwhile, WeightWatchers has evolved beyond providing food and dietary plans. The company now offers access to telehealth services, coaches and workshops. In addition to weight-loss medication, such as Wegovy, the company also plans to target women's health issues, such as menopause.
WW stock began trading again on June 27 and closed at 27 per share. The stock rallied to 40 per share by Monday's close, marking a 48% gain in just six trading days.
WeightWatchers jumped as high as 46.95 on Tuesday after the research note. Shares reversed for a 1.1% decline on the day.
IPO Wins
This year has seen a revival for IPO stocks with a number of successful launches.
Circle Internet Group, which manages the USDC stablecoin, went public at 31 per share in early June and is already trading above 200.
AI hyberscaler CoreWeave launched at 40 per share in March and scrambled to a high of 187 by June 20 before easing to around 151. CoreWeave recently announced a $9 billion buyout of Core Scientific.
Karman Holdings stock has doubled following the defense contractor's Feb. 13 IPO. KRMN stock went public at 22 per share and has climbed above 45 amid escalating conflicts in the Middle East and Europe.
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