UPDATE: Auriga Downgrades Weight Watchers to Hold

Auriga lowers its rating on Weight Watchers WTW to Hold as it sees limited upside to shares amid challenges ahead, but raises its price target to $89, up $2, which reflect the recent run-up in the stock. Auriga notes, "While expectations were for Weight Watchers to have tough comps in 1Q, the softness was below our expectations. For 1Q12, management expects North American paid meeting weeks to drop in the mid-single digits and UK meeting paid weeks to likewise produce single digit paid week declines. In addition, the company is making a significant marketing investment in 1Q12, which is expected to raise marketing costs 750bps y/y and will likely contribute towards a 200 basis point increase in marketing for FY12. Another adverse factor is the slower price increase adoption as members were grandfathered into the lower price." WTW closed at $79.34 a share on Tuesday.