J.P. Morgan Securities cut its rating on WTW stock to "neutral"
The shares of Weight Watchers International, Inc. (NASDAQ:WTW) are down 7.2% at $32.58 in early trading -- and touched a new annual low of $32.32 out of the gate -- on a downgrade from J.P. Morgan Securities. The analyst nearly halved its price target to $37 from $70, and downshifted to "neutral" from "overweight." The analyst is "throwing in the towel" on Oprah-endorsed WTW, and predicted the company will struggle to significantly generate memberships this year.
WTW stock is now down almost 70% from its June 20 peak of $105.72. Amid its downtrend, the stock has seen a stiff ceiling at the 30-day trendline.
Prior to today's drubbing, the majority of the 10 analysts following WTW were handing out a "strong buy" rating, with only two doling out "holds." What's more, the towering consensus 12-month price target of $82.50 represents a 153% premium to current levels. Additional downgrades or price-target cuts could exacerbate selling pressure on the diet stock.
Conversely, in the options arena, traders have taken a much more pessimistic stance than usual. Currently, WTW's Schaeffer's put/call open interest ratio (SOIR) of 3.33 sits in the 78th percentile of its annual range, suggesting that near-term traders have rarely been more put biased in the past 12 months.