Auriga Reiterates a 'Hold' on Weight Watchers (WTW); Conclusion of Dutch Tender May Cause Volatility

Auriga reiterates a 'Hold' on Weight Watchers (NYSE: WTW) price target of $89.00.

Auriga analyst said, "Weight Watchers is scheduled to conclude its Dutch tender auction later this week, from which it may repurchase up to 25% of the company's shares. While over half of the shares possibly being tendered are through the Weight Watchers' majority shareholder, Artal Holdings, the rest or approximately $720 million is being offered to other shareholders. Since the announcement was made, Weight Watchers shares have generally stayed towards the upper half of the $72-$83 tender price range. We believe that shares are being supported by the tender offer following the recent 4Q11 results and 1Q12 guidance, in which management was cautious regarding its near-term outlook as it faces tough comps in the quarter following last year's successful introduction of PointsPlus. After the completion of the offer, we believe shareholder focus will shift away from the tender price and back towards its core business. Given the expected decline in 1Q12 meeting weeks and attendance, we believe the lower near-term growth prospects may create pressure on the shares after the conclusion of the tender. Overall, we reiterate our Hold recommendation and price target but will be looking for an opportunity for investors to acquire shares at a lower price point."

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 $80.73 yesterday.

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