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WW International (NASDAQ:WW) shares are up by double-digits for a second day as investors pour into the stock ahead of Oprah Winfrey’s special Monday night.
Winfrey is expected to mitigate the damage from her decision to leave the WW International (WW) board and advocate for the company’s Sequence Clinic, now called WeightWatchers Clinic.
The stock took a beating recently on concerns that the explosive popularity of weight-loss medications from Eli Lilly (LLY) and Novo Nordisk (NVO) would be detrimental to WW International’s (WW) business as a caloric-restrictive weight loss platform. The negative press was exacerbated by Winfrey’s decision to leave the WW corporate board after admitting to using weight-loss medications. WW International (WW) stock plummeted as much as 58% since reporting quarterly results to an all-time low of $1.59.
But assurances from the company’s CEO that the company would beat Q1 subscriber guidance fueled a 21% rally Friday, amplified by Winfrey’s remarks about her decision to leave the WW board.
“I wanted to be able to talk about whatever I wanted to talk about,” Winfrey said referring to her special on ABC Monday night, “and Weight Watchers is now in the business of being a weight health company that also administers drug medications for weight. I did not want to have the appearance of any conflict of interest and so, I resigned from the board,” Winfrey told CNN.
Guggenheim sees Winfrey’s weight loss special on ABC (DIS) Monday night as positive for the WeightWatchers Clinic program and reiterated its Buy rating.
“We remain unconcerned about WW’s ability to service its debt…any worries about a recapitalization or default this year are overblown,” Guggenheim analysts Jack Wallace and Mitchell Ostrovsky said in a note to clients last week. The pair added Monday that the recent sell-off in the stock is “not tethered to any publicly known fundamental risk that has developed since the Q4 print.”
