The Growing Wellness Trend: Analyst Predicts Positive Outlook for Wellness Companies
BofA Securities Analyst Bullish on Wellness Companies as Health Trends Drive Stock Growth
In a recent report, BofA Securities analyst Alexander Perry highlighted the promising prospects of wellness companies as more consumers prioritize healthy living and increase spending on wellness products. The analyst pointed out that younger generations, particularly Gen Z and millennials, are leading the charge towards healthier lifestyles, which is positively impacting wellness stocks.
The shift towards wellness is evident in the rising spending on fitness, activity-based leisure, and wellness products. According to Bank of America data, there has been a surge in gym memberships, with fitness-related spending reaching a 19-month high. Additionally, leisure activities like pickleball are gaining popularity, and interest in healthy eating, recovery, and non-alcoholic beverages is on the rise.
Bank of America card data further supports this trend, showing a 7% year-over-year increase in fitness center spending in February, the highest jump in 19 months. While all generations are increasing their wellness spending, Gen Z and millennials are allocating a significantly higher portion of their budgets to fitness activities.
Gen Z households spend 2.8 times more than baby boomers on fitness, with millennials leading total spending and holding over 30% share. Higher-income consumers are driving this growth in the wellness sector, with trends like healthy eating, recovery, and anti-aging products fueling the demand.
The analyst also highlighted the growing interest in cold plunges, red light therapy, and pickleball, which has seen a 46% year-over-year surge in participation, reaching 20 million players. Perry’s top wellness picks include Life Time Group Holdings Inc. (LTH), Planet Fitness Inc. (PLNT), and SharkNinja, Inc. (SN).
Life Time Group Holdings Inc. (LTH) has had its price forecast raised to $45 from $40, reflecting its pricing power and strong membership demand. The company is well-positioned to benefit from rising wellness trends, including the expansion of pickleball and cold plunge offerings. Planet Fitness Inc. (PLNT) is experiencing accelerated same-store sales in the first quarter, with a $115 price forecast. SharkNinja, Inc. (SN) is expanding its product line with the launch of the CryoGlow red/blue light therapy mask and has a $140 price forecast, making it the analyst’s top pick for wellness discretionary products.
Overall, the wellness sector is gaining traction as consumers prioritize health and well-being, driving stock growth for companies that cater to these trends. Investors are keeping a close eye on these wellness companies as they continue to innovate and capitalize on the growing demand for healthy living products and services.
