Life Time Group Holdings, Inc. ( NYSE: LTH ) shares slipped on Thursday as Wells Fargo cut its rating on the stock to a Sell-equivalent.
The downgrade comes just a day after a warning on a slower recovery than previously anticipated during the company’s second quarter earnings release aroused some caution on the path ahead.
“We no longer view LTH as a reopening story, with membership net adds now seen flat in the 2H22,” the bank’s analysts explained. “With recovering memberships no longer a key growth driver, LTH will be increasingly reliant on additional dues increases, in-center spending growth, and premium-priced new memberships.”
The analysis added that “recovery has plateaued” as memberships remain about 15% below pre-pandemic levels. Economic headwinds are likely to continue to constrain recovery towards returning to 2019 levels, according to the analysis.
Alongside a downgrade from a Hold-equivalent rating to a Sell-equivalent rating, the bank took its price target on the stock to $13 from a prior $15. Shares of the health and wellness company fell 1.42% in premarket trading.
Read the latest earnings call transcript .
For further details see:
Life Time Group cut to Sell at Wells Fargo