Weight Watchers International Inc. (WTW) rose the most in more than seven months after announcing partnerships with American Express Co. (AXP) and NYSE Euronext (NYX) to provide health programs to employees.
The company increased 8.4 percent to $62.52 at the close in New York, the biggest gain since May 9. The shares advanced as much as 7.5 percent yesterday after Weight Watchers announced the agreements Jan. 3.
American Express, based in New York, will pay 100 percent of the cost to its employees for as long as one year for Weight Watchers meetings, while New York-based NYSE will cover half of the costs, Weight Watchers said in a statement.
Partnering with companies saves overhead costs for meetings and likely encourages clients to “stick around longer” because their employer is paying, Kurt Frederick, an analyst at Wedbush Securities Inc. in San Francisco, said in a telephone interview.
“The benefit to Weight Watchers is they have to do less marketing,” said Frederick, who rates the shares “outperform.”
The New York-based weight-management company has recently sought to draw more customers by advertising to men and using celebrities, including Charles Barkley and Jennifer Hudson, in commercials.
“Health-care costs are continuing to spiral out of control,” Weight Watchers Chief Executive Officer David Kirchhoff told Bloomberg News on Jan. 3. Companies see Weight Watchers as “a really effective, low-cost and scalable tool that they can employ today,” he said.
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