Citi maintains Sell on Hims & Hers, holds $30 price target

On Thursday, Citi reiterated its Sell rating on Hims & Hers Health, Inc. (NYSE:HIMS), maintaining a price target of $30.00. The firm’s analyst, Daniel Grosslight, commented on the company’s recent pricing strategy adjustments following Novo’s decision to reduce the cash pay price of its weight loss drug Wegovy. Hims & Hers has responded by offering discounts on its multi-month subscription bundles.

Customers can now subscribe to a 6-month plan for $549 per month, a decrease from the previous $599 per month rate, resulting in a total savings of $300 over the half-year period. Additionally, the cost for a 3-month subscription has been reduced to $599 per month from $649 per month, saving subscribers $150 over the span of three months.

It was noted that the pricing for a 4-week supply remains unchanged at $899. This pricing adjustment by Hims & Hers is seen as a direct response to Novo’s pricing strategy, aiming to remain competitive in the market by passing on the savings to consumers through its subscription model.

The company’s decision to adjust its subscription pricing comes as part of its strategy to attract and retain customers seeking treatment for weight management, an increasingly competitive sector within the pharmaceutical industry.

Citi’s reaffirmation of the Sell rating and the $30.00 price target reflects the analyst’s perspective on the company’s stock performance in light of these recent developments. The price target suggests the firm’s view on the stock’s potential movement and its valuation based on the analyst’s assessment.

In other recent news, Hims & Hers Health Inc. has been the focus of several analyst reports and industry developments. Analysts at Citi maintained a Sell rating for the company, highlighting a $30 price target, while Truist Securities kept a Hold rating with a $45 target, and Morgan Stanley (NYSE:MS) reaffirmed an Equalweight rating with a $40 target. These ratings come amid competitive challenges from Evernorth, a division of Cigna (NYSE:CI), which introduced a new pharmacy benefit that caps monthly costs for weight loss drugs at $200. This pricing strategy could challenge Hims & Hers, which offers similar medications at higher prices.

Additionally, Morgan Stanley noted a 25% year-over-year increase in app downloads for Hims & Hers in April, despite a slight monthly decline. The company saw a 67% year-over-year sales growth in the second quarter to date, slightly below its guidance. Hims & Hers had projected second-quarter revenue between $530 million and $550 million, which was slightly below analyst expectations. Meanwhile, a court ruling in favor of the FDA’s decision to remove certain drugs from the shortage list, including Mounjaro and Zepbound, may also impact the market dynamics for GLP-1 drugs.

These developments highlight the competitive landscape and regulatory environment Hims & Hers is navigating, with potential implications for its business model and partnerships.

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