Soon to make New Years' resolutions, many Americans will vow to shed pounds, and Weight Watchers International is looking to cash in on future loss.
Credit Suisse analyst Charles Boorady says the weight-loss company has reason to celebrate as its customers start foregoing the egg nog.
Lowering health-care costs is, he says, is the number one reason, as insurance companies such as UnitedHealth Group incorporate Weight Watchers into their anti-obesity programs.
"I think the potential is enormous. It cost 50 percent more to cover health-care costs for someone who is obese versus someone at normal weight. It's a big focus of employers and insurers. We think Weight Watchers has a unique franchise to address that opportunity," says Boorady.
Boorady cited increased traffic to the online business and increased marketing to men as the secondary reasons the company will improve over the long term.
"Online business brought $400 million in revenue. The stock is worth what the online business alone is doing for the company, and we don't think investors have given them credit for that," he says.
An upcoming promotion by famous baskeball star Charles Barkley, intended to attract male customers, may increase the customer base.Page 1 of 3 | Next Page