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On Thursday, Truist Securities maintained a Hold rating on Hims & Hers Health Inc. (NYSE:HIMS) with a price target of $45.00. Truist’s analyst commented on the implications of Evernorth’s recent announcement regarding weight loss drug coverage. Evernorth, a division of Cigna Corporation (NYSE:CI), disclosed a new pharmacy benefit on May 21, which caps the monthly cost of weight loss medications Wegovy and Zepbound at $200. This cost also contributes to the patient’s annual deductible.
The announcement highlighted Evernorth’s successful negotiations with drug manufacturers and an intention to simplify and automate prior authorization processes to expedite patient access to these medications. The analyst suggested that other Pharmacy Benefit Managers (PBMs) might adopt similar strategies due to the precedent set by major PBMs typically mirroring each other’s actions.
The price point set by Evernorth is significantly lower than current market rates for similar medications, including Hims & Hers Health’s compounded Semaglutide, which is priced at $399 per month for a one-month subscription. In comparison, Wegovy is currently offered at $899 per month, and Liraglutide is available for $499 for a three-month subscription, the minimum duration offered.
During the first-quarter earnings call of 2025, Hims & Hers Health had expressed minimal interest in integrating insurance into its platform. The company’s stance was based on the assessment that the majority of consumers are underinsured with high deductibles, rendering Glucagon-like peptide-1 (GLP-1) drugs unaffordable even for insured individuals. However, Evernorth’s move to provide weight loss coverage could challenge this viewpoint. Truist’s analysis indicates that as GLP-1 drug prices decrease and more insurers cover these medications, it could pose a risk to the cash pay market for GLP-1 treatments, which has been a segment Hims & Hers Health operates within.
In other recent news, Hims & Hers Health, Inc. announced the issuance of $1 billion in convertible senior notes, maturing in 2030, as part of its strategy to raise capital. The notes, sold in a private offering, carry a 0% interest rate and include provisions for conversion to common stock under certain conditions. In earnings-related developments, Truist Securities raised its price target for Hims & Hers to $45 while maintaining a Hold rating, following the company’s first-quarter earnings report for 2025, which featured a revenue beat driven by GLP-1 sales. Meanwhile, Morgan Stanley (NYSE:MS) reaffirmed an Equalweight rating with a $40 target, noting a 67% year-over-year sales growth for the second quarter to date, slightly below the company’s guidance.
Citi maintained a Sell rating with a $30 target, citing potential challenges from Evernorth’s new benefit plan, which may impact Hims & Hers’ partnership with NovoCare. The plan offers a more cost-effective option for weight loss medications, potentially affecting the company’s market position. Additionally, Truist analysts highlighted a court ruling favoring the FDA in a case involving drug shortages, which could have implications for the GLP-1 market, a segment relevant to Hims & Hers. These developments reflect a dynamic environment for Hims & Hers as it navigates financial strategies, market challenges, and regulatory landscapes.
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