Morgan Stanley maintains “underweight” on WTW, raises estimates

Morgan Stanley reiterated its “underweight” rating on Weight Watchers International Inc (NYSE: WTW). WTW posted its Q3 EPS at $0.68, ahead of the estimates and the consensus. The results were driven by upside in revenues, international attendance and gross and operating profits. WTW narrowed its EPS guidance for the full-year to $2.58-$2.63 from $2.52-$2.70, implying Q4 guidance of $0.48-$0.53. Morgan Stanley raised its EPS estimates for WTW to $2.63.

Despite robust performance by Weight Watchers International Inc, Morgan Stanley maintains its “underweight” rating for WTW. This is on the basis of potential long-term performance risks in WTW’s three key segments.