Citi maintains sell on Hims & Hers stock, price target at $25

On Tuesday, Citi analyst Daniel Grosslight reaffirmed a Sell rating with a price target of $25.00 on Hims & Hers Health, Inc. (NYSE:HIMS). The analyst’s statement followed the announcement of a new partnership between Hims & Hers and Novo Nordisk (NYSE:NVO), which aims to provide customers with access to Wegovy pens through the NovoCare Pharmacy. This collaboration is coupled with Hims & Hers’ clinical care and nutritional guidance for a monthly package priced at $599.

Hims & Hers’ new offering is $100 more expensive than NovoCare’s direct service, but includes additional clinical support. The analyst believes that despite the higher cost, the package will attract customers, especially as the option for bulk semaglutide compounding by 503B facilities is set to end on May 22nd. Grosslight suggests that Hims & Hers may not profit from the Wegovy sales directly but could benefit from marketing fees and margins on the clinical support and nutritional guidance included in the bundle.

This partnership, according to Grosslight, makes the company’s $725 million revenue target for 2025 more attainable. He also noted that the approach taken by Hims & Hers is similar to that of other virtual health providers who have partnered with pharmaceutical companies like Lilly to offer alternative treatments.

In the press release, it was highlighted that the companies are developing a roadmap to integrate Novo Nordisk’s treatments with the scale of Hims & Hers to enhance long-term outcomes for chronic disease patients. Hims & Hers will continue to offer a range of medications, oral kits, proteins, nutrition, and care plans. Currently, Hims & Hers still advertises personalized doses of compounded semaglutide on their website, starting at $165 per month, but the new partnership may impact the company’s marketing strategy for the compounded product.

In other recent news, Hims & Hers Health, Inc. has announced a partnership with Novo Nordisk to offer Wegovy®, an FDA-approved obesity medication, through its platform. This collaboration aims to enhance obesity care by providing comprehensive health services alongside the medication, with a monthly subscription starting at $599. In financial developments, Citi analyst Daniel Grosslight has reduced Hims & Hers’ stock price target to $25 from $27, maintaining a Sell rating. Grosslight anticipates that the company will exceed earnings estimates, although he expects a slowdown in core revenue growth. Meanwhile, the FDA has issued a warning letter concerning Hims & Hers’ compounded topical finasteride products, citing safety concerns. BofA Securities maintained an Underperform rating for the company with a $22 price target, noting a slowdown in sales growth and concerns about the impact of the FDA’s warning. Additionally, Hims & Hers announced that COO Melissa Baird will transition to an advisory role, a change disclosed in an SEC filing. Investors are closely monitoring these developments as the company navigates regulatory challenges and leadership transitions.

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