With the weather warming up, weight loss stocks are scorching.
Look at WW International (WW), for example.
Granted, WW International had a rough run thanks to slowing growth. However, it appears the company may have turned a major corner with the acquisition of Sequence. That acquisition will now allow WW to enter the prescription drug and clinical weight loss segment.
Better, according to DA Davidson analyst Linda Bolton Weiser, who has a buy rating on the WW stock with a $9 price target says: The company’s acquisition of Sequence and ability to offer scripts for Wegovy is a “game-changer”. Over 70% of WW members are obese and possible drug candidates, and if the company trades up just 10% of its obese North America subs to $99 monthly drug maintenance, it could add over 50% to North America sales.
Even Goldman Sachs analyst Jason English just upgraded WW to a buy rating, with a price target of $13 from $3.80 a share.
Or, look at Novo Nordisk (NVO).
Since late 2022, the stock doesn’t seem to know the meaning of the word, down.
In fact, since September, NVO ran from a low of about $95 to $167.11 – and could see higher highs. All after it raised its forecast for full-year sales and operating profits on the heels of strong demand for its weight loss drug.
According to Morningtar, “The Danish insulin maker said in the first quarter, at constant exchange rates, its operating profit rose 28% on sales growth of 25%. Thanks mostly to prescription trends for weight-loss drug Wegovvy, Novo Nordisk now expects operating profit growth between 28% and 34% on sales growth between 24% and 30%, vs. its earlier view of 13% to 19% growth in both operating profit and sales for the year.”
Even Planet Fitness (PLNT) is on the move.
All as people fight to get back into shape for the warmer months ahead. Better, Piper Sandler analysts just raised their price target on PLNT to $98 from $96, with an overweight rating.
And, as noted by TheFly.com: Piper’s semi-annual teen survey results and channel checks both point to “abnormally strong” new member sign-ups in Q1 for Planet Fitness, which bodes very well for 2023 results given its membership model, the analyst tells investors in a research note. The shares have lagged year-to-date, from what is likely a pushback on valuation, yet the company’s current valuation on a relative basis to the S&P 500 is at trough levels, contends Piper. The firm thinks Planet Fitness shares currently present an “extremely attractive risk/reward” and should be bought before the Q1 results in the first half of May.