WW International's (WW) business mix is shifting faster than expected as the firm is repositioning for a world with weight loss medication, Morgan Stanley said in a note Wednesday.

The report said a 50% quarter-over-quarter growth in Clinic subscriptions in Q1 was offset by shrinking Behavioral subscriptions through the peak season for the first time ever.

"The magnitude of this shift is outsized in 1Q as WW capitalized on the launch of GLP-1 pills during peak season, but still implies a faster ongoing mix shift than we previously expected," it said.

Given the smaller scale of Clinic and uncertainty on go-forward growth, the report said the faster decline of behavioral business is a larger factor, leading to a cautious view on the opportunity for a near-term outperformance.

"In order to get more positive, we'd like to see both stabilizing behavioral trends and clinic traction," the report said. "With that

seeming unlikely to happen in 2026, we remain EW."

EW refers to an equal weight rating. Morgan Stanley cut its price target to $21.00 from $34.50.

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