“Winfrey is and will continue to be a key advertising partner [as the company expands] by broadening its social media influencer base,” Brathwaite said, adding that Weight Watchers this year signed record producer DJ Khaled, chef Eric Greenspan, comedian Kevin Smith and singer Hélène Ségara as influencers.
Shares of Weight Watchers rose more than 5 percent in early trading Tuesday. The stock was up 96 percent in the past year through Monday’s close at $ 86.90. J. P. Morgan’s price target of $ 105 a share is 21 percent higher than that closing price.
Partnering with Winfrey was one of “three key events” in 2015 that “helped stabilize sales” in 2016, Brathwaite wrote. Combined with the other two key events – overhauling its points program and the new WW mobile application – Weight Watchers is now heading steadily toward is annual revenue target of over $ 2 billion by 2020, according to Brathwaite.
Winfrey, who owns about 8 percent of Weight Watchers’ stock and is on the board of directors, signed a promotional deal that lasts until October 2020. Her role as a Weight Watchers spokeswoman is a critical asset “for the company given her marketing clout in the U.S.,” Brathwaite wrote.
J.P. Morgan said it believes the company benefits from “Winfrey’s wide network of influential senior leaders across companies in the U.S.”
The company reaches members as they follow the progress of celebrity endorsers who are going through weight loss and health improvement programs. It aims to increase engagement with specific demographics through the steady sharing of information on social media “rather than traditional weight loss ads” depicting before and after pictures, Brathwaite wrote.
It also has been trying to expand beyond a distinct customer demographic, as the average member is dominantly female, white and about 50 years old. Instead of marketing specifically toward men, Brathwaite wrote that J.P Morgan believes that Weight Watchers’ rebranding as “WW” showcases the company “as a lifestyle brand,” while the addition of male influencers like Khaled and Greenspan will also help increase male membership.
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