Wedbush Says Weight Watchers (WTW) Should Trade a 10% Discount to Peers

November 6, 2012 10:17 AM EST Send to a Friend
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Price: $26.05 +1.92%

Rating Summary:
    4 Buy, 4 Hold, 2 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 29 | Down: 45 | New: 4
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Commenting on Weight Watchers (NYSE: WTW) Q3 earnings report, analyst at Wedbush noted improvements in North America and lower than expected marketing spending. Looking forward, analysts said the company could see improved results in 2013 due to "fixes in the at-work business, planned significant program changes in major markets, new marketing campaigns, and benefit from retail transformation initiatives."

"Given Weight Watchers’ strong brand name, attractive cash flow, and variable cost structure, partially offset by its high debt load and recent operational issues, we believe shares of WTW should trade at an EV/2013E EBITDA multiple of 9x, a 10% discount to other midcap healthy lifestyle firms GNC (NYSE: GNC), Hain Celestial (Nasdaq: HAIN), Herbalife (NYSE: HLF), Nu Skin (NYSE: NUS), United Natural Foods (Nasdaq: UNFI), and Vitamin Shoppe (NYSE: VSI)," said analyst Kurt Frederick.

Wedbush has a Neutral rating on Weight Watchers (NYSE: WTW) and a price target of $50.00.

For an analyst ratings summary and ratings history on Weight Watchers click here. For more ratings news on Weight Watchers click here.

Shares of Weight Watchers closed at $47.48 yesterday.


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