Shares of health and wellness company Weight Watchers (WTW) were rising nearly 9% Monday after analysts at Morgan Stanley published a bullish note on expectations the company's falling subscription growth will stabilize in its fiscal first quarter.
The firm has an equal weight rating and $21 price target on the stock, representing a 15% upside from the stock's opening price Monday of $18.20. At last check, shares were up 8.6% to $19.23.
"In February, management stated that subscriber growth was sequentially improving from the start of the year, though still trending negative. Breaking down app download data on a weekly basis, we see that trends appear to have sequentially improved though 1Q in-line with that commentary," analyst Vincent J. Sinisi wrote.
According to Morgan Stanley's channel checks, Weight Watchers is in line to have 4.5 million subscribers in the first quarter, down 2.5% year over year but in-line with guidance.
Morgan Stanley maintained its forecast for 4.3 million subscribers with an estimated loss of 24 cents per share. Wall Street is modeling for a loss of 27 cents per share.
Weight Watchers is scheduled to release its first-quarter results on May 2.