Weight Watchers is going parabolic again
Weight Watchers shares are going parabolic again.
After rallying more than 100% on Monday, shares were up by as much as 30% in morning trading on Tuesday.
The company announced that Oprah Winfrey was joining its board, and bought a 10% stake of newly issued stock. Oprah made about $70 million on Monday's share price spike.
And analysts consider Oprah's involvement as a big endorsement for the brand. On Tuesday, Barclays analysts wrote,
"The news yesterday that Oprah Winfrey was investing in the equity of WTW and would help market and promote the program is a major coup for the company. It confirms our view that the Weight Watchers brand has value, though we were not creative enough to foresee this move as a way of realizing that intrinsic value."
They upgraded the stock to "Equal Weight" from "Underweight" with a new price target of $14 from $5, a 180% increase.
The analysts also increased their fourth-quarter earnings-per-share estimate by $0.01 to $0.07.
Weight Watchers shares are still down 29% year-to-date.
Here's a chart showing the stock over the past five days:
